Increasing Longevity and the Economic Value of Healthy Ageing and Longer Working

This paper is concerned with the potential impact of an ageing population on the UK economy. The UK is going though a very rapid period of population growth from around 55.9m in 1980 to a projected 71m by 2030. Over the same period the structure of the population will alter significantly with the population aged 65+, doubling from 8m in 1980 to 16m by 2030. A major reason for this is that people are living much longer but the paper shows that increases in life expectancy (LE) are not being matched by increases in health life expectancy (HLE) or working life expectancy (WLE). A widening gap between HLE and LE implies a larger proportion of the population will rely on social security benefits and demand more health care; a widening gap between WLE and LE implies that taxes will have to rise to pay for pensions and welfare unless productivity keeps pace. The paper presents a simplified economic model of these effects based on three scenarios: a continuation of present trends (passive scenario), worsening health related to increases in the prevalence of chronic disease, and improving health (called the active ageing scenario). It concludes that improvements in LE need to be balanced by gains in WLE and HLE; failure to do so could increase migration pressures to bolster the work force, increasing the population still further and pote