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Britain is “clearly unprepared” to deal with this pressure of aging societyA group of Lord’s peers have sounded the alarm as they paint a grim picture for the future of young people in the country.
In a devastating report, the Economic Affairs Committee of the House of Lords has accused governments of failing to deal with the issues that would arise. People live longer.
The group argues that continuing to raise the state pension age – soon to be raised to 67 – is no longer an adequate solution to the economic pressures of an aging population, as an increasing number of people already exiting the workforce Before they reach him.
These warnings are based on the finding that people aged 65+ will constitute 18.9 per cent of the total population in 2023, up from 16.5 per cent in 2011 and only 13 per cent in 1972 – marking a sharp increase.
Recent research by Office for Budget Responsibility (OBR) believes this could rise to more than a quarter (27 per cent) by 2074.
The Lords Committee believes this will have a particularly strong impact on those born now and in the recent past, as they will live longer and will therefore need to save more to retire later and live comfortably in old age.
The report shows that fertility rates have also been declining since the late 1970s, falling to a record low of 1.44 (children per woman) in England and Wales in 2023 – below the 2.08 needed to ensure long-term ‘natural’ replacement of the population.
Paul Johnson, former director of the Institute for Fiscal Studies (IFS), says this trend will have ‘serious consequences’, adding that current fertility rates “indicate a rapidly falling population” which “poses immediate challenges for policymakers”.
“What to do with all those extra school places?” he posed many times“So far in England we have seen a decline in the number of teachers, but hardly any decline in the number of schools, perhaps partly because the policy landscape is so complex when it comes to making the decision to close schools, As pupil numbers continue to fall, this is unlikely to be sustainable,”
He adds: “The change still raises a more fundamental question. Will we take advantage of this decline in numbers to reduce spending on education? Or will we use it to increase spending per pupil and try to improve quality? I don’t know.”
The OBR has estimated that “at current policy settings”, the economic effects of these trends will increase borrowing above 20 per cent and debt to around 270 per cent of GDP by 2070. This is due to rising factor costs state pensionPlus social and health care needs.
Lord Wood of Enfield, Chairman of House of Lords The Economic Affairs Committee said: “People are having fewer children and living longer and successive governments have not focused sharply on seismic impacts.” Ageing Population will impact our economy and society.
“Raising the state pension age, which saves Government money, but grows pensioner Poverty, because many people have stopped working by the age of sixty, is an alarm bell. It is important to keep more people in their fifties and sixties in work or back into work.
“Successfully meeting this challenge will require changing the way the youth of today and tomorrow approach financial management. They will need to plan and prepare, from a very early stage in their lives, to work longer and save more.
A Labor peer says the lack of government strategy on the issue shows it is “not being taken seriously enough”.
A government spokesperson said: “We recognize the challenges of an aging population and are taking action to improve healthy life expectancy and improve adult social care.
“We are moving towards a national care service with higher quality care, better choice and better integration between services – supported by more than £4 billion of additional funding for adult social care by 2028-29.
“Through our Get Britain Working reforms, we will boost employment by improving jobcentres and providing personal work and skills support.”