• New Office for National Statistics (ONS) analysis reveals 1-in-4 people will be aged 65 or over by 2050, compared to 1-in-5 currently ()
• Recent data suggests rapid growth in economic activity among older workers
• Improvement at least in part due to state pension age hikes and abolition of default retirement age
• ONS considers introducing new measure to take account of shifting work patterns
Tom Selby, senior analyst at AJ Bell, comments:
“This latest ONS analysis challenges the assumption that an ageing population will automatically burden younger workers.
“While estimates suggest a combination of longer life expectancies and lower birth rates will cause a further surge in the proportion of people aged 65 and over in the UK, there is also some evidence that many people are working into their sixties and beyond.
“Clearly if the older population are healthy and economically active then the impact of this demographic shift on younger generations will be neutered to a degree. But it’s worth noting the recent increases in activity among older workers have coincided with rising state pension ages, particularly for women, and so could yet prove to be a short-term phenomenon.
“Given this shift in working patterns it makes sense for the ONS to focus its analysis on economic activity, rather than picking an arbitrary age to determine ‘dependency’.
“Recent data has also pointed to a significant slowdown in life expectancy improvements after decades of unbroken improvements. It is not yet clear exactly what has driven this trend, although it’s possible austerity measures introduced since 2010 have contributed.
“But if – and it is a big if – we are experiencing the end of life expectancy improvements, rather than a temporary blip, it would have enormous implications both for the ONS’ future projections and wider Government policy.”