Ageing population

Population trends

People born in the baby boom just after the Second World War will reach their late 80s by 2035 – and are more likely to reach that age than the previous generation.

Age breakdown of England population by national population projections (2012 and 2032)

From 2012 to 2032 the populations of 65-84 year olds and the over 85s are set to increase by 39 and 106 per cent respectively whereas 0-14 and 15-64 year olds are set to increase by 11 per cent and 7 per cent respectively.

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Source: 2001 census and 2011 census population estimate

The projected change in the age structure of the population in England over the next 20 years

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Source: Office for National Statistics (2010). Statistical Bulletin. 2008-based subnational population projections

Regional population projections

Regional population projections reflect the national trend – with the exception of London. In London there are 1.3 people under the age of 15 for every person over the age of 65, while for rest of the country the number of people over the age of 65 outnumber those under the age of 15 (1).

The impact of the ageing population

The impact of the ageing population on health and social care services is hard to predict. It may lead to increased costs or the growing number of older people may create new economic and social opportunities.

Factors suggesting that the ageing population will increase costs

  • the annual costs of health and social care are significantly greater for older people
  • the number of elective and non-elective hospital admissions for older people has increased more rapidly than the growth in absolute numbers
  • current projections suggest that a high proportion of older people in the future will be living on their own and are therefore likely to require formal care
  • the number of older people with care needs is expected to rise by more than 60 per cent in the next 20 years.

Growth in activity over last 20 years, by age group, England, 1989/90-2009/10

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Source: Figures obtained through correspondence with the Department of Health

If current working patterns continue, the ‘old age dependency ratio’ (that is, the number of people over the state pension age for every 1,000 people of working age) is likely to increase:

  • in 1971 the ratio was 280 per 1,000
  • in 2009 this ratio increased to 314 per 1,000 
  • by 2032 the ratio will become 349, even with implementation of higher state pension ages.

Public expenditure on pensions and related benefits is going to rise from 4.7 per cent of GDP in 2007 to 6.2 per cent of GDP in 2032 (2).

Old age dependency ratio per 1,000 people of working age, UK, 1971-2051

Source: Population estimates and 2010-based principal population projection, Office for National Statistics February 2012

Factors suggesting that the ageing population creates economic and social benefits

After deduction of the costs of pensions, welfare and health care, the Women's Royal Voluntary Service have estimated that the over-65s make a net contribution to the UK economy of £40 billion through tax payments, spending power, donations to charities and volunteering (3).

The Office for National Statistics estimated that over the past decade, an increasing number of older people (those aged 65 and over) are in work. In October to December 2010:

  • 2.7 per cent (270,000) worked full-time, up from 1.2 per cent (106,000) in January to March 2001.
  • 6.1 per cent (600,000) worked part-time, up from 3.4 per cent (306,000) in January to March 2001 (3).

Older people also contribute financially through a variety of other routes, including:

  • spending power of £76 billion, to rise to £127 billion by 2030, growth of 68 per cent
  • provision of social care worth £34 billion, growing to £53 billion by 2030
  • volunteering, which has a hidden value of £10 billion per annum
  • donations of £10 billion to charities and family (4).

If people can stay healthy for longer, they will remain engaged members of society.

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References

  1. Office for National Statistics (2011). Statistical Bulletin. 2010 based population projections, October 2011
  2. Crawford R, Emmerson C and Tetlow G (2009). Survey. A survey of public spending in the UK Institute of Fiscal Studies
  3. Office for National Statistics (2011). Statistical Bulletin. Older workers in the labour market - 2011
  4. Women's Royal Voluntary Service (2011). Article. Gold age pensioners: valuing the socio-economic contribution of older people in the UK