Michelle Mitchell presentation


Published on

Age UK's Charity Director General, Michelle Mitchell's presentation at the Agenda for Later Life Conference 2012

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • Older people have been hit by sharply rising costs of fuel and food, particularly those on lowest incomes.Those who rely on savings have been badly hit by low interest rates
  • The increases in state pension age removes a key barrier to allowing people to work longer, it will also mean many people have no choice but to work longerSupport to work longer: increase training and emphasis on life long learning, flexible working, tackle age discrimination in labour market
  • Michelle Mitchell presentation

    1. 1. The Economics of AgeingMichelle MitchellCharity Director GeneralAge UK8 March 2012
    2. 2. The fiscal challenge• Demographic change, costs of health and care, costs of social security• OBR: public spending to rise from 36.3% to 41.7% of GDP between 2015 and 2060 – Age-related public spending to rise by 2.3% in relation to GDP between 2015 - 2030
    3. 3. Some perspectiveThe fiscal challenge we face in 2015 because of ageing will be one-third the size of the current deficit reduction targets, with three times as long to phase in changesThe OBR uses a number of assumptions about ageing:• Increases in cost of healthcare are assumed to be the result of ageing. However – this may be affected, for example, by individual life choices and medical advances – recent research shows impact of ageing is far outweighed by other factors such as growth of technology.• The numbers of people working in later in life will affect the ‘dependency ratio’ – Analysis conducted by the National Institute of Economic and Social Research (NIESR) suggests that no early retirement would have boosted UK GDP by around 1 per cent (£14 billion) in 2009
    4. 4. Debate must be seen as opportunityA new concordance between generations – reframing the debate• We’re all in the same boat• Successive generations benefit from increasing life expectancyLife expectancy at birth: 1948 1951 2010 2031 2051 Men 65.78 65.56 77.7 82 85 Women 70.09 70.41 81.9 86 88Life expectancy at age 65: 1951 2011 2031 2051 Men 12.1 21.6 22 (87) 23 (88) Women 15.5 24 24 (89) 25 (90)
    5. 5. Economic contribution of older peopleGrey market in UK: £109 billion in 2010Older people: £5,154 per year in taxesWRVS calculated that over 65s currently benefit the economy to a total of £175.9bn. This includes delivering social care worth £34bn and volunteering worth at least £10bn. This compares to welfare costs of £136.3bn2.8m people aged 50 and over provide unpaid care which has been estimated to contribute £50bn in unpaid family care
    6. 6. There are huge wealth inequalities across thegenerations Total household wealth including pensions by Age Group Great Britain 2006/08 85+ 75-84 65-74 10th Median 90th 55-64 Age Group 45-54 35-44 25-34 16-24 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 Average Household Wealth (£)
    7. 7. Age UK Silver RPI shows falling real incomes of oldercohorts during the current economic crisis Inflation and Older People Change in Headline RPI and Silver RPI January 2008 - September 2011 20% 18% 16% 3.58 4.49 5.28 5.68 5.40 14% 12%(%) 10% 8% 6% 4% 2% 0% 55-59 60-64 65-69 70-74 75+ Headline RPI
    8. 8. Individual and the state need to do more…OECD: UK spent 6.6% of GDP in 2007 on pensions, rising to just 8.1% by 2050. – Germany spent 10.4% of GDP on pensions in 2007 and is forecast to spend 12.3% by 2050 – Average for the whole OECD is 11.4% by 2050UK state pension spending is low in comparison with OECD countriesOnly 38% of people of working age contribute to a non-state pension
    9. 9. People who can must be prepared towork longer and save moreState must provide more supportEmployment rate 50 – 64: 65%People 50 – 64 who are ‘workless’: 1 millionMore must be done to encourage pension saving throughout the life course – Pensions auto enrolment the beginning
    10. 10. Those who can afford it should be preparedto use their assets in later lifeContribute to costs of care (Dilnot proposals)
    11. 11. Leadership from GovernmentAvoid stereotypes and the smoke and mirrors tactic of intergenerational conflict – Educating the public about what it means to be an ageing society – Challenge notion that people contribute during their working life then become a burden once they retireFocus on creating the support and opportunities, for example to update skills, maintain health and work longerReform of social care system to fairly balance contributions between the state and individualsFurther incentives to save and plan for later life