UK: AGEING POPULATION

UK: AGEING POPULATION

1. GENERAL

   • Country faces a problem of how to provide millions of people that might be retired for 20 years or more. The problem is only worsened by the falling birth-rate.
   • The average family size used to be 2.4 but now it’s 1.7.

2. BENEFITS

   • Many businesses developed to service the ‘grey pound’. e.g DIY outlets, gardening centres, specialist holiday companies (cruises, golf).
   • Retired people do part or full time work - Over 25% of employees at B&Q aged over 55. Retired people are useful for companies because they can work flexible hours and do not carry costs such as National Insurance.
   • Firms providing private healthcare or insurance regard the elderly as a good business.
   • Investment of pension funds by fund managers provides a valuable source of income for companies in both private and public sectors. e.g many British pension funds invest in big companies like BP.

3. PROBLEMS

   • Many elderly people only have the basic State pension to live off - price of food or fuel rises it becomes harder for those on fixed pensions to compensate for it.
   • World Health Organisation warns that ageing populations worldwide will lead to increasing heart disease, cancers and diabetes. Pressure on NHS.
   • Ageing population creates a need for new housing e.g smaller properties with no stairs, wider doorways and lower kitchen units. Lack of care homes in Britain.
   • Growing pension is emerging, State pensions in UK are paid for by National Insurance contributions. As life expectancy increases, more people are claiming pensions for longer.

4. Is immigration the answer?

   • Since the late 1940s there has been a steady flow of Immigrants from Commonwealth countries such as India, Pakistan and Caribbean nations like Jamaica.
   • Recent immigrants from the EU tend to be young and well qualified. Family related migration is also becoming more common. Immigrants tend to be of younger working age as well.

5. Strategies to Deal with an Ageing Population

   • Age of retirement has been increased, at the moment retirement age is 65 however in 2050 it will be raised to 68. This increases the size of the working population.
   • Encouraging immigration of working age people – UK allowed unlimited immigration of people from countries who joined the EU in 2004. In 2004 about 80% of immigrants that came to the UK from the new EU countries were 34 or under.
   • Encouraging more women to have children – new UK pension proposals mean women won’t lose out on state pensions if they take career breaks to have children
   • Increase taxes and national insurance - provides more funding
   • Encourage more private pensions - reduces pressure on state pensions
   • Convert old primary schools into nursing homes

6. CAUSES

   • Drop in fertility rate due to better contraception, delayed marriages, emancipation of women & career development, cost of raising children.
   • Increase in life expectancy due to medical advances, food supply, sanitation and better standards of living
   • Baby Booms- Lots of babies born from 1940-1960. They are now retiring.