Saturday, 8 March 2014

The UK - An Ageing Population


·       UK GDP per capita is $38,500 (2012) and population growth rate is 0.8%
·      Stage 4 (low fluctuating) of the DTM as both death rates and birth rates remain low and fluctuate, giving a steady population; typical of many well developed countries.
·      The number of people >65 is increasing (16% in 2011) while 0-14 is decreasing (18% 2011)
·      This is due to the ageing of the 1960s baby boomers combined with improving healthcare.
·      The latest projections are for 5½ million more elderly people in 20 years’ time and the number will have nearly doubled to around 19 million by 2050.
·       The ratio of people of working age to people over 65 could fall from 3.7:1 to 2.1:1 in 2014

·       The Office for Budget Responsibility said that spending on the state pension, social care and healthcare will rise from 14 per cent of Britain's GDP to almost a fifth.
·       Those in work may have to pay higher taxes. This could create lack of encouragement to work and disincentives for firms to invest; therefore there could be a fall in productivity and growth.
·       An ageing population could lead to a shortage of workers and therefore pushing up wages causing wage inflation.
·       Health experts believe the number of people suffering from severe long-term conditions such as cancer and heart disease will grow and could mean a rising demand for nursing care.
·       Although life expectancy is increasing, healthy life expectancy is not increasing as fast, meaning people are ill for longer periods at the end of their life and putting greater strain on healthcare.
·       Statins (cholesterol lowering drugs) have become the single biggest component of the NHS prescribing budget and their cost is likely to increase further. Also the added costs of other drugs, diagnostic tests and surgical procedures are also likely to place pressure on the health service.
·       The ‘grey pound’ and the ‘grey vote’ mean that new businesses can develop (e.g. Saga holidays) and political parties need to pay particular attention to the needs of older people (e.g. David Cameron’s recent pledge to extend the ‘triple lock pension protection’ until 2020 if the Tories are win the 2015 election). This could lead to policies being introduced that benefit older people but perhaps aren’t so good for younger citizens.
·       Older people tend to me more flexible, mature and experienced and they often have a strong work ethic. Nationwide Building Society employs 16% of its workforce over 50 and say customers often prefer to speak to someone more mature and younger members of staff can learn from their older colleagues.
·       Free childcare provided by grandparents is said to be saving families over £7.3billion per year.

·       Increased immigration of working age population; A report by the Office for Budget Responsibility found that allowing more than 140,000 immigrants into Britain a year, equivalent to 6million people, would help increase the overall number of people who are in work and improve public finances.
·       An increase in retirement age (the age to gain state pensions) will reduce costs. It was initially planned for the state pension age to rise to 68 for men and women in 2046. However George Osborne recently announced that this would be brought forward to the mid-2030s.
·       Pro natal strategies to be introduced.
·       Businesses can provide jobs more suited to older people to encourage them to retire later and make use of their experiences and expertise.

Discussion point: Can the benefits of an ageing population outweigh the negatives?

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