Ageing Population Flashcards
(10 cards)
Rising life expectancy
Over the past few decades, life expectancy in the UK has resin significantly driven by advances in healthcare nutrition and living standards
Falling birth rates
The UK’s fertility rate has declined contributing to a higher proportion of elderly people relative to the younger population
1.6 million people aged 65+
Have on unmet needs for care and support 
In 2021. 24.4% of the UK population
Was over 60 years of age
Aging workforce
A larger proportion of the population is now over the age of 65 and the number of people in the group is expected to enter significantly over the coming decades
Economic challenges
Pressure on healthcare
As the population age is, the demand for the healthcare services increases , particularly for the long-term care, chronic disease management (86% of people over the age of 85 have one chronic health condition). Space the NHS facing substantial financial pressure to provide adequate services for the growing need.
Pension Barton
A larger retired and population means increased demand for pensions and benefits. The UK pension system, largely reliant on the working age populations contributions. 2008 decided women retire at the same age as men.
Workforce shortages.
As people retire, there are a few younger people entering the workforce, leading to potential labour shortages. This can slow economic growth, reduce productivity and impact this sustainability of the pension system.
Tax based concerns
A small proportion of working age people relative to retirees may reduce tax revenues straining public finances with fewer workers contributing to the tax base. The government may face difficulty funding welfare programs and services.
Economic opportunities of an ageing
Silver economy.
The increasing number of older consumers present new economic opportunities, known as the silver economy. That includes sectors such as healthcare ,retirement living ,tourism and leisure .
Increased life expectancy and productivity
People are working longer and remaining productive for longer due to better health. The success of the NHS means that we take fewer sick days than before. Although workers bring experience and expertise which could be leveraged to benefit businesses and organisations.
Innovation in technology
Need to support an aging population may spur innovation particularly in fields like robotics, healthcare technologies and home care solutions
Policy responses and adaptation
Pension reform
The UK government has begun implementing reforms to the state payment system, such as raising the retirement age and encouraging private savings
Encouraging older workers to stay in the workforce.
There is a growing need to support older workers who want to stay employed longer through policies like flexible working arrangements, retraining programs and anti-age discriminant laws.
Healthcare investment
The government must prioritise investing in the healthcare infrastructure, workforce development and preventative care to reduce long-term costs .
Long-term outlook
Sustainability of the welfare state.
The UK must address the economic challenges posed by its ageing population through a combustion of policy changes:
Increasing The retirement age
Boosting the workforce participation rate of older people
Rethinking how pensions and healthcare are funded.
Shifting labour market dynamics
The labour market will have to adapt to the challenging demographic structure. AI may mitigate some of the negative effects of an ageing workforce
Generational equity
Future generations may face a heavier economic burden due to the increasing number of retirees. Balancing the needs of the elderly with those younger people will be crucial and ensuring intergenerational fairness.
Discuss the economic consequences of an ageing population
lower output as a smaller working population (1)
• higher dependency ratio (1) leads to a greater tax burden on working population (1)
• state receives less in taxation which worsens the public finances (1) and has to pay out more in pensions/benefits (1)
• higher savings rate as the ageing population might be concerned to save for their old age (1). This could lead to the paradox of thrift (1) which means that higher saving leads to lower consumption which leads to lower AD and negative impacts on the whole economy (1)
• higher spending on healthcare (1)
• creates the need for more jobs in health and social care sectors (1)
• could lead to decline in the size of population reducing the size of the economy (1)
• the silver pound/pensioner poverty affects the spending power of pensioners
• may drive innovation and adoption of artificial intelligence (Al) (1)
could result in future increase in productivity (1)
• difficulty in filling skills gaps in the labour market (1)
• some economists argue that a smaller workforce may lead to higher future wages as firms have to compete for available labour
