Annex 2: Demographic changes (relevant
throughout the report)
65. The Office for National Statistics (ONS)
has updated its projections up to 2021 based on the recent release
of data from the 2011 Census. In England[25]
in 2021, compared to 2011:
· There will be 24% more people aged 65
and over
· There will be 39% more people aged 85
and over.[26]
66. The ONS has projected that in England in
2030, compared to 2010:
· There will be 51% more people aged 65
and over
· There will be 101% more people aged 85
and over.[27]
67. Looking further into the future, Guy Goodwin,
Director of Population and Demography Statistics, ONS, told us
that over a 50-year period we can expect a doubling of the population
in the UK aged over 65, and a very substantial—four times
or more—increase in the main projection of those aged 85
and over.[28]
68. These demographic shifts are occurring for two
different reasons. First, people are living longer; secondly,
we are now reaping the consequences of significant changes in
the UK's birth rates in the period following the Second World
War—the 'baby boom'. The first is a long-run phenomenon.
The second is beginning to hit now, and will last for around the
next 30 years (see figure 1 below).
FIGURE 1
Population aged under 16 and 65 and over,
United Kingdom[29]
Living longer
69. The same dynamics that have led to a higher
proportion of older people in the population have also yielded
a steady rise in our expectation of life at birth and at later
ages. There are two principal methods to predict future life extensions:
period life expectancy and cohort life expectancy. Period life
expectancy assumes that a person will experience the age-specific
mortality rates that hold at that time. The cohort method
takes the predicted changes in those rates and builds them into
the prediction. We have used the cohort method below, as it provides
a more useful description of the length of life that individuals
might expect.[30]
70. Babies that were born in 2011 can expect
a median lifespan of 93.75 years for males and 96.7 years for
females. Males born in 1991 can expect to live, after 2011, for
another 71.0 years and females for another 74.3 years.[31]
Professor Sarah Harper, Professor of Gerontology and Director,
Oxford Institute of Population Ageing, University of Oxford, told
us that if we use cohort life expectancy for the 2007-birth cohort,
"you can say that 50% of that cohort will still be alive
by the time they are 103".[32]
CONFIDENCE IN PROJECTIONS
71. Professor Philip Rees, Emeritus Professor,
School of Geography, University of Leeds, explained that there
is significant academic discussion about whether there will be
continuing reductions in mortality and associated increases in
life expectancy, with two polar views. The first, put forward
by Jay Olshansky, was that we are approaching the limits to life
expectancy, and that a number of disease trends (for example,
increasing obesity leading to much higher rates of diabetes and
associated mortality) will mean that we will not see the continuation
in improvement in mortality rates at older ages.[33]
The second, proposed by James Vaupel, was that the historical
record of the countries with the best life expectancy records
suggested no limits to improvements driven by progress in wellbeing
and medical science. Professor Rees related how, by translating
these optimistic views into future forecasts, studies have suggested
that very high proportions of current birth cohorts in a sample
of advanced countries will survive to be centenarians.[34]
The Committee asked Professor Rees about the levels of confidence
that it is possible to have in projections of the number of older
people that we can expect to see in this country. His response,
broadly, was that the older the age group under discussion, the
less confidence it is possible to place in the projections.[35]
Healthy life expectancy and disability-free
life expectancy
HEALTHY LIFE EXPECTANCY
72. Healthy life expectancy is defined as expected
years of remaining life in 'good' or 'very good' general health.[36]
In 2008, UK men at age 65 had a healthy life expectancy of 9.9
years, and women of 11.5 years (see figure 2).[37]
Guy Goodwin told us, however, that while the latest figures suggested
that the healthy life expectancy for women was broadly increasing
at the same rate as life expectancy, the healthy life expectancy
of men was increasing at a lower percentage increase than life
expectancy.[38]
FIGURE 2
Life expectancy and healthy life expectancy
at age 65 for males and females (for the period 2007-09) with
the UK's constituent countries[39]
Source: Government Actuary's Department
DISABILITY-FREE LIFE EXPECTANCY
73. Disability-free life expectancy is defined
as expected years of remaining life free from a limiting long-standing
illness or disability.[40]
Professor Harper suggested that international data supported the
notion that people were "delaying the onset of disability".
This meant that while life expectancy had increased, the number
of years that people spend with disability had also increased.
Thus, although people are seeing an increase in the number of
years that they will spend with disability, this is decreasing
as a percentage of their life.[41]
74. Drawing on a range of projections, Professor
Rees found that population ageing will increase the population
suffering from limiting long-standing illness by 39% between 2010
and 2050, but that if the decreasing trends of the last decade
are reproduced in the next four decades, the increase will be
clawed back to 6%.[42]
Professor Rees also stressed that taking into account the specific
disability suffered is very important. A significant challenge
will arise from the projected growth in numbers of people with
dementia. An 83% increase in the number of people with dementia
by 2036 will place substantial extra demands on formal and informal
care networks.[43] The
Trades Union Congress (TUC) reported that the difference between
the local authority areas with the highest and lowest levels of
disability-free life expectancy at 65 is 12.1 years for men, and
12.3 years for women (see Annex 7).[44]
EFFECT ON LENGTH OF WORKING LIFE
AND ACTIVE AGEING
75. Professor Peter Taylor-Gooby of the University
of Kent argued that if people living in the most deprived areas
enjoyed the same rate of disability-free life expectancy as the
most advantaged, they would have a further 2.8 million years of
active life, in which they could contribute to society.[45]
There are signs that older people's involvement in the labour
market is showing consistent growth. Between April and June 2011,
over a third of women in England aged 60 to 64 and nearly one-quarter
of men aged 65 to 69 were still economically active.[46]
For men, the estimate of average age of withdrawal from the labour
market increased from 63.8 years in 2004 to 64.6 in 2010. For
women, it increased from 61.2 years in 2004 to 62.3 years in 2010.[47]
The number of people of state pension age and above in employment
in the UK has doubled over the past two decades. Two thirds of
these people work part-time.[48]
Past changes in fertility
76. Our society is 'ageing' in another sense.[49]
After the Second World War, the UK's birth rate rose and remained
relatively high for two decades. The increase in the size of the
working population that resulted as these cohorts entered the
labour market helped to counteract the long-run economic effects
of rising longevity. But those cohorts are now nearing retirement.
Instead of mitigating the long-run impact of longevity they will
add to it.[50] During
the years on which this Report focuses, this will be of particular
importance.[51] It underlies
the economic and fiscal challenges outlined in Annex 4.
EFFECT ON THE OLD AGE SUPPORT RATIO
(OSR)
77. It is predicted that each person of the new
full state pension age in 2035 will be supported by 2.87 people
of working age, as compared to 3.22 people in 2015 (a decrease
in the old age support ratio, or OSR, of 38%).[52]
As the Central Government Departments' evidence to us suggested,
"even with the proposed [state pension] changes, the support
ratio declines in the future".[53]
Any future restrictions on immigration would also decrease the
old age support ratio by reducing the pool of workers in the country.[54]
78. The structure of the UK's population in 2035
as estimated before the recent Census was as follows. The estimates
based on the 2011 Census are not yet available.
FIGURE 3
Estimated and projected age structure
of the United Kingdom population, mid-2010 and mid-2035[55]
79. Professor Rees also outlined changes in a
'very old age support ratio' (VOSR), which divides the number
of people at ages 50-64 by the number of persons aged 85+, whose
children mostly will be in the former age group. The VOSR decreases
from a median of 8.32 in 2010 to 3.11 in 2050, a fall of 63%.
Though there is a much greater uncertainty about the accuracy
of the VOSR than there is about the accuracy of the OSR, Professor
Rees suggested that this implied that more care will need to be
provided by persons outside of the late middle age group of children
of the very elderly.[56]
Policy implications of demographic
shifts
80. The rising number of older and 'older old'
people in the population (many of whom will have chronic health
problems), and the effects associated with the post-War generations
beginning to withdraw from full-time work, underpin this Report.
The need to support this age group and the need to avoid unsustainable
tax burdens falling on younger people will have an effect on how
the Government and individuals need to think about saving and
paying for older age (see Annexes 4, 5, 7 and 18).
81. As Annexes 9 to 15 lay out, greater numbers
of older, often frail people will lead to significant challenges
for the provision of healthcare and social care. The doubling
by 2030 of the number of people aged 85+ will have a substantial
impact on those public services that are particularly important
for older people, an impact for which they are worryingly ill-prepared.
25 Due to the effects of devolution, our focus is primarily
on England: see Annex 1. Derek Jones, Permanent Secretary of the
Welsh Government, wrote to the Committee stating that: "The
impact of demographic change will have particular significance
for Wales, which has the highest concentration of older people
within the UK nations ... The numbers of those aged 85 and over
are increasing at the fastest rate. Since 1983, their number has
more than doubled and latest projections show it will double again
up to 2033, by which time it will have reached 160,000, some 5%
of the total projected population". Back
26
ONS, Interim 2011-based subnational population projections:
local authorities, counties, regions and England: single years
of age, persons. Back
27
Central Government (DoH, DWP and DCLG), written evidence. Back
28
Q 19 Back
29
ONS, Measuring National well-being, Social Trends 42 - population,
17 January 2012, p.9. The graph was mid-year estimates for 1971
to 2010-based projections for 2011 to 2031. Source: ONS, National
Records of Scotland, Northern Ireland Statistics and Research
Agency. Back
30
ONS statistical bulletin, Life expectancy at birth and at age
65 by local areas in the United Kingdom, 2004-06 to 2008-10, 19,
October 2011, p.16. Back
31
ONS, 2010-based national population projections lifetable template:
England and Wales, p.16. Back
32
Q 101 Back
33
Q 100 (Simon Ross, Population Matters). Back
34
Professor Philip Rees, University of Leeds. Back
35
Professor Philip Rees, University of Leeds. Back
36
ONS, Pension Trends, Chapter 3: Life expectancy and healthy
ageing (2012 edition), 16 February 2012, 3-4. It should be noted
that due to European Union requirements, the definition of healthy
life expectancy has changed recently: the definition formerly
was based on expected years of 'fairly good' or 'good' health. Back
37
ONS, Pension Trends, Chapter 3: Life expectancy and healthy
ageing (2012 edition), released: 16 February 2012, 3-8. Back
38
Q 42 (Guy Goodwin and Ben Humberstone, Head of ONS Centre for
Demography, ONS). Back
39
The Scottish Parliament Finance Committee, 2nd Report, 2013 (Session
4): Demographic change and an ageing population, p.10. Back
40
ONS, Pension Trends, Chapter 3: Life expectancy and healthy
ageing (2012 edition), 16 February 2012, 3-4. Back
41
Q 95 Back
42
Professor Philip Rees, University of Leeds, supplementary written
evidence. Back
43
Professor Philip Rees University of Leeds. Back
44
Trades Union Congress (TUC). Back
45
Professor Peter Taylor-Gooby, University of Kent. Back
46
ONS, Pension Trends, Chapter 3: Life expectancy and healthy
ageing (2012 edition), 16 February 2012, 3-9-3-10. Back
47
ONS, Pension Trends, Chapter 4: The labour market and retirement
(2012 edition), 16 February 2012, 4-9. Back
48
ONS, Older Workers in the Labour Market, 2012, 13 June
2012, pp.1-4. Back
49
Central Government (DoH, DWP and DCLG), written evidence. Back
50
Pensions: Challenges and Choices. The First Report of the Pensions
Commission, 2004, pp.10-11. Back
51
British Society of Population Studies. See Annex 4 for a definition
of the 'dependency' ratio. Back
52
ONS, National Population Projections, 2010 - Based Statistical
Bulletin, 26 October 2011, http://www.ons.gov.uk/ons/dcp171778_235886.pdf;
Professor Philip Rees, supplementary written evidence. These figures
take into account projected changes to the state pension age,
and as such are very sensitive to policy decisions. In their written
evidence, the British Society for Population Studies told us that
"If a fixed age threshold had been used, such as age 65,
the OSR for the UK would have been 3.9 in 2010 and 2.6 in 2035
(based on the ONS 2010 principal projection)". Cf. Professor
Philip Rees; Professor Anthea Tinker, King's College London (KCL). Back
53
Central Government (DoH, DWP and DCLG), written evidence. Back
54
Population Matters; Institute for Public Policy Research; British
Society of Population Studies written evidence; Q 40 (Professor
Ludi Simpson, University of Manchester); Q 34 (Suzie Dunsmith,
Head of Population Projections Unit, ONS). Back
55
ONS, National Population Projections, 2010-Based Statistical Bulletin,
26 October 2011. Back
56
Professor Philip Rees, supplementary written evidence; Q 96. Back
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