Grey Matters

THE UNINVERSITY OF HULL
Grey Matters
A qualitative and quantitive analysis of the
impact of the ageing population
201103734
6/29/2014
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of the document. Type the abstract of the document here. The abstract is typically a short summary
of the contents of the document.]

201103734 Lord Norton of Louth Word Count 6817
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Contents
Introduction ............................................................................................................................................2
Aims and hypothesis...............................................................................................................................4
Methodology...........................................................................................................................................5
Relevance................................................................................................................................................5
Analysis ...................................................................................................................................................6
Economics ...........................................................................................................................................6
Pensions Data..................................................................................................................................6
The Grey Pound ..............................................................................................................................7
Conclusion.......................................................................................................................................8
Employment........................................................................................................................................9
Pension age reform.........................................................................................................................9
Employment Generated by the Elderly.........................................................................................10
Conclusion.....................................................................................................................................14
Transport...........................................................................................................................................15
Health................................................................................................................................................18
Conclusion.............................................................................................................................................20

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Introduction
Dr J Finlay Alexander once wrote that “on looking through some old death certificate books, I found
one of 1945 in which the ages seemed to be unusually high” (Alexander, 1950). Though this was
originally examined as far back as 1950, the issue, and potential impact of, and ageing population
are still relevant today.
As figures 1, 2 and 3 show, it is irrefutable that the population of the England and Wales (and by
extension we assume the entire United Kingdom) has not only increased over the past one hundred
years, but the demographics have changed significantly. However, it is interesting to note that the
population of those over a certain age has dramatically risen over the past century, with their
proportion of the population significantly increasing.
Figure 3: Population of England and Wales 2011 (BBC, 2012)
Figure 1: Population of England and
Wales 1911 (BBC, 2012)
Figure 2:Population of England and
Wales 1961 (BBC, 2012)

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Table 1 further examines this information, which demonstrates the extent of the effect more
commonly known as the ageing population.
1911 1961 2011
Total Population 36,100,000 46,100,000 56,100,000
Number of people over 65 years old 1,878,388 5,496,018 9,212,200
Number of people over 75 years old 518,021 1,975,568 4,359,500
Number of people over 85 years old 63,928 301,505 1,244,000
Those over 65 as a percentage of the
population
5.2% 11.9 % 16.4%
population
1.4 % 4.3% 7.8%
population
0.2% 0.7% 2.2%
Table 1: Showing increases in the number of people over the age of 65, over the last 100 years
As we can see, the gross number of residents of England and Wales over the age of sixty-five
increased over five times since 1911, whereas the population as a whole has not even doubled. It is
irrefutable that the population of the England and Wales is
ageing, but the question still remains; how much of a
problem is such an ageing population.
When the Coalition came into office, the House of
Commons Library publish a report entitled “Key Issues for
the New Parliament” (Mellows-Facer, 2010), and one of
the issues the authors identified was ageing population. As
is shown in Figure 4, the issue of the ageing population is
predicted to worsen over the next 20 years in terms of raw
numbers. This project aims to find out if such an ageing
population is a ‘problem’, or simply an ‘issue’.
Figure 4: Projection of the Ageing Population
(Cracknell, 2010)
Comment [A1]: Taken from BBC Census data

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The cost of the UK having these demographics is outlined in figure 5. As we can see, the amount of
money spent on the state pension (administered to all those over the age of sixty five) is not only
almost half of the welfare spending in Great Britain, but it is over ten per cent of total government
spending.
Figure 5 Government spending 2011/12 (Rogers, 2013)
Aims and hypothesis
The principal objective of this research is simple;
Are the face value economic burdens of having an ageing population, negated by the
benefits that such a demographic arrangement brings?
It would appear on the face of it, it real cash terms, that those of a certain age are a detriment to
society, rather than an asset. However, through assessing the more subtle ways in which the ageing
Comment [A2]: Rogers

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population, this research aims to discover whether pure cash terms are a reliable factor in
determining the impact of the ageing population. From that aim, the hypothesis would become;
Although gross expenditure within the welfare system would makes it appear that the ageing
population isn’t economically sustainable, upon further analysis of more factors, the ageing
population will appear to be widely beneficial.
Methodology
With the amount of possible factors to analyse, it would be impossible to assess every net benefit
and cost that an ageing population had on the economy. Therefore, the research will be broken
down into four general categories: Transport; Health; Employment; and Economics, and a general
assessment of each will be used to determine whether or not the current trend in the ageing
population is a benefit or a burden. These five categories will be analysed through a variety of
secondary analysis based on primary data, provided by organisations relevant to each of the topics
mentioned, such as the Office of National Statistics, the House of Commons Library, and the
Confederation of Passenger Transport and so on. Previous literature on the ageing population shall
be utilised to compliment the research throughout.
Relevance
The research conducted in this project is relevant for two main reasons: austerity measures, and
disproving ignorance. Firstly, in an periods of austerity, such as the one the Government is claiming
we are in now, overall government spending has to be cut. Everyone has their differing opinions as
to where the axe should fall with these cuts, but it is often the case that the public feel they should
fall to those who are perceived to be underserving. This is exemplified in a YouGov poll, in which
74% of the population supported the Coalition capping benefits at £26,000 for those who do not
work (Kelner, 2013). However, it very seldom that people question pensioner benefits in the benefit
debate, despite these being a substantial state hand-out. This research aims to see if reductions in
such benefits need to be made, if the contribution that the older generation make to society is
considerably lacking.
The public often also have a misguided view on how welfare in this country is divided up amongst
those in receipt of it. In a recent survey conducted by YouGov on behalf of the Trade Union
Congress, it was found that despite only 3% of the welfare budget being given over to those
receiving unemployment benefit. Those that were surveyed believed that this figure was around the
41% mark, thirty eight percentage points higher than the actual figure (YouGov/TUC, 2012). This

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ignorance of the real numbers allows us to infer something about the impact of the ageing
population; the general public do not know just how great the proportion of the welfare budget is
taken over by pensions. Without this information being common knowledge, the face value
economic impact remains unnoticed, and may continue to do so until the spending is out of control.
Therefore, this research is relevant not only to quell the myths of where the welfare spending
actually goes, but to then debunk the myth that the elderly are receiving something for nothing.
Analysis
Economics
Taken at face value, having a larger percentage of people of older generations in your society,
particularly a society with good welfare provision, there is likely to be a significant increase in the
percentage of GDP spent on pensions. However, just as this spending is likely to be on the rise due to
more elderly people, there are now more people of elder generations putting into economy as well,
which has become known in the vernacular as “The Grey Pound”. The question is whether or not the
increase in the amount the ageing population take from the state in terms of pensions, is
counteracted by their contributions to the economy through their spending.
Pensions Data
As Mirrelles notes
“The common fear is that is that the sustenance and care of the elderly will become an
increasing and eventually heavy burden on the ‘productive’ members of society……the
apparent problem takes the form of projections of strongly rising contributions to the social
security” (Mirrlees, 1997)
To assess if this statement has any grounding in reality, one should examine pension data over a
period of time. To examine the amount we spend on pensions at a fixed point in time would not
offer a very clear interpretation of what the effect an ageing population actually has. Therefore, an
overtime analysis of such data is required. To keep an easy comparison between the census data
shown in figures 2, 3, and four, the following data has been sampled from the years 1910, 1960, and
2010.
In 1910, the UK Government at the time spent £341.4 on overall spending, £900,000 of which was
on pensions (Chantrill, 2014). This is approximately 0.2% of total Government spending. By 1960,
total government spending was £9.1 billion (Chantrill, 2014), over twenty six times higher than it was

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fifty years previously. In the same time period however, spending on pensions increased to £746
million (Chantrill, 2014), which is not only more than double total government spending fifty years
previously, but is an incredible eight hundred and twenty eight times as high as in 1910. This also
equates to approximately 8% of total Government spending. By 2010, the Government is spending
£672 billion (Chantrill, 2014)in total, a growth of seventy four times the amount seen in 1960. In the
same time period pension spending has increased 17% of overall spending, to £116 billion (Chantrill,
2014), a growth of one hundred and fifty six times that of 1960 levels. As this data demonstrates, the
rate at which Government spending on state pensions increases is substantially higher than the
amount at which overall Government spending increases. If this trend continues (the trend being an
average of a further 8% of GDP every fifty years), by the year 2050, almost a quarter of all
government spending could be on state pensions, which is obviously an unsustainable situation.
This data clearly shows that the elderly generations that are the product of an ageing population are
getting a considerable amount of taxpayers money spent on them. However, is it fair amount when
compared to, for want of an example, the younger generation? As the research previously showed,
that over 70 years of age in Britain, make up 11% of the population, and through the state pension,
they are receiving approximately 16% of overall spending. On the converse of this, those between
ages 4 and 18 (those of compulsory schooling age) make up 17% of the population (BBC, 2012), and
yet the funding they receive is disproportionately allocated. The Education budget, which can be
argued to be an equivalent to the pension’s budget for those of schooling age, is only £88 billion
(Chantrill, 2014), four percentage points lower on overall spending than that of pensions.
We can therefore come to the conclusion that not only do the elderly receive a substantially amount
of ever increasing social security, but they also receive more than their fair share when compared to
the other ‘non-productive’ members of society. This is further reinforced by a report produced by
the Reform Research Trust entitled “Old and Broke” (Cawston, et al., 2011). The report discovered
that while in the five years between 2011 and 2016, the number of over 65s will increase by
1.4million, whereas the number of working age people under the age of 50 will actually decrease.
Therefore, the economic implications of the ageing population, if the demographics remain at their
current trajectories, do not bode well for the economic outlook of the UK.
The Grey Pound
Usually, when assessing the economic impact of the ageing population, it is normally the case to
focus on welfare provision through pensions. Too much time is spent is focussed on what the
increasing elderly population take out of the economy, and not enough is focussed on what they

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contribute. If their contribution to society outweighs their state pension welfare receipts, then in
pure economic terms, the impact the ageing population has could be seen as a positive one.
In recent years, a term has entered into common usage when used to describe the consumer
spending power of those of a certain age. Although no set definition exists, the so called “Grey
Pound” is often used to describe the spending habits of those of the elderly generation, usually
those over 50, and it recent years its value has increased dramatically.
It was reported as early as 1997, that not only was the Grey Pound becoming a considerable
economic force, but that the over 50s were “one of the most affluent groups in society” (The
Independent , 1997). Considering this was taken from an article over sixteen years old, one could be
forgiven for dismissing its findings as irrelevant. On the contrary, the trend seems to not have
dissipated, but become exacerbated by the further increase of elderly people due to the effects of
an ageing population. According to Peter Gore, Professor of ageing and vitality at Newcastle
University, the over 50s hold approximately 80% of the nation’s wealth, and are responsible for over
40% of all consumer spending. To put in real terms, that figure equates to almost £260 billion of
consumer spending (Gore, 2012). Considering in 2011, those over the age of 50 only made up a
third of the population (BBC, 2012), and those over 65 only a sixth, the elderly are punching above
their weight when it comes to contributing to the economy. When it comes to a direct comparison
with the £116 billion spent on state pensions for the over 65s, Gore states that the net contribution
of that particular demographic is approximately £40 billion a year (Gore, 2012).
This phenomenon of the Grey Pound has been further reinforced by a recent report from the
Institute of Directors. They are informing their members that the over 50s, (which as we have seen,
are worth 80% of the country’s wealth) are only subject to about 10% to marketing focus, which
they rightly state is a “missed opportunity”. If the population continues to age in this way, and the
demographics continue to shift, marketing will eventually move to incorporate these new
consumers. This is only going to further increase the net contribution the elderly make to society,
which infers that an ageing population, if it is harnessed in the right way, can only be beneficial.
Conclusion
It is clear from the statistics, that in raw economic terms, the elderly are contributing substantially
more to the Treasury then they are taking out of it. In this regard, it cannot be argued otherwise that
the benefits of an ageing population outweigh the costs.

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Employment
When society thinks of the elderly, it would not be to assuming to think of them as non-working
individuals that rely on the state for their care. Obviously, if this is the case, it would be reflected in
the pension system, and the welfare system. However, given the recent state pension age changes,
and the amount of potential employment that is offered by the elderly themselves, it wouldn’t be
too presumptuous to think this was no longer the case.
Pension age reform
Up until recently state pension age was sixty years of age for women, and sixty five years of age for
men, and this reflected the demographics of when people were generally seen to be too old to work.
State Pension age was more or less synonymous with when people retired. However, a series of
announcements, brought forward by the current Coalition government, have sought to alter this.
The first of these announcements came in 2011, when compulsory retirement at 65 was abolished,
and phased out in the April of the following year (BBC, 2011). With this alteration, there was no
longer a need for companies to shed employees over a certain age, and therefore these people
could continue working. Without any restrictions on age, the ageing population could continue work
without fear of mandatory dismissal. With this legislation in place, and the ageing population trend
showing no signs of easing up, it will allow people to continue working. This means more tax and
national insurance contribution will be paid by the elderly for longer periods of time. As we have
seen from the previous analysis, the tax take is higher from the elderly then their relative costs, and
with legislation like this being introduced, the amount they cost in pensions will decrease, and the
amount the contribute will increase. All in all, this change represents a win-win scenario for the tax
payer.
Further to the announcement of abolishing compulsory retirement, came the announcement in
George Osborne’s 2011 Autumn Statement (The Chancellor of the Exchequer, 2011), where
increases in the state pension age were announced. Further announcements have also been made
over the course of this Government, in particular in the 2012 Queen’s Speech, which stated that
State Pension age will be extended to age sixty six for both sexes by 2020, and will be further
extended to sixty seven by the year 2028 (HM Queen Elizabeth, 2012). Along with further extensions
planned, to sixty eight in the mid-2030’s and sixty nine in the late-2040’s (and with certain sources
saying it could rise to be seventy years of age by the 2060’s (Hyde, 2011))one thing is clear; Britain’s

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elderly are going to have to work longer. The main reasoning behind this is simple; the Government
has recognised the population is ageing, and altered the public finances accordingly. The Chancellor
defended his decision to rise the State Pension age by saying that
“The reason we do this is because our country is getting older and we want to go on being
able to afford really pensions for people. There is not a bottomless pit of money.”
With these changes taking place, it is not only clear that more elderly people will be employed for
longer due to them not being able to receive State Pension, but also that the issue of the ageing
population has been addressed accordingly by the current Government. The elderly, who will now
have to work for more time before being in receipt of State Benefits, will seem less of a burden on
society.
Employment Generated by the Elderly
It is now apparent that more elderly people will be working longer and, therefore, directly
contributing to the economy through their tax take for a longer period of time. However, due to the
growth in what the Institute of Directors refers to as the ‘oldest old’ (Insitute of Directors, 2014) the
ageing population also contributes more indirectly to the economy too.
As an individual gets older, especially when they reach their eighties and nineties, they become
increasingly reliant on others for the most basic of needs. As we saw earlier, in the last one hundred
years, those over the age of seventy five have increased almost eight times, which meaning that this
increasingly reliant segment of the population has vastly gone up. To analyse what impacts this new
found reliance on others has, this research aims to analyse perhaps the biggest way in which this
new found phenomenon has an indirect effect on the economy; care homes. Care homes are
normally viewed as the paragon of elderly reliance, and due to the ever increasing older
demographic, they are being used more and more. To fully assess their impacts, a number of
measures have been taken.
Although there may be more, the website ‘carehome.co.uk’ lists just over 20,000 care homes in
England (Carehome.co.uk, 2014), and for the purpose of this research, figures obtained from this
website shall be used as though they represent all care homes. To ascertain the information, phone
calls were made to four care homes in each region of England (as according to the website, there are
fifty three regions of England, which lead to two hundred and twelve care homes in total). The figure

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of two hundred and twelve is very handy for research purposes, as when times by a hundred, it
creates a number (21,200) which is close to the total number of care homes listed on the
carehome.co.uk website. Therefore, any total figures and averages can be estimated using this
general rule. Although this data is only collected from England, as opposed to the four constituent
parts of the United Kingdom, using basic laws of averages we can make the assumption that what
applies to England, (which makes consists of 84% of the total population of the United Kingdom) can
also be applicable to the rest of the UK. By applying percentage rules to the figures given below, this
research will be able to determine data approximations for the entire United Kingdom, based on the
figures supplied by England.
The following four questions were asked of all the care homes contacted:
1. How many residents are within your care?
2. How many staff does your organisation employ?
3. How long does the average resident remain within your care?
4. What is the weekly rate for one of your residents?
The first question shows just how prevalent the issue of an ageing population is. Although it is
impossible to know the exact age distribution of those who are resident in care homes, we can safely
assume that a majority of individuals will be over the age of seventy five. This question can
demonstrate, on certain assumptions, just how many people of a certain age group rely on care
homes. If this demographic of the population is set to continue increasing, we can safely assume
that the money generated by this sector, will continue to increase also.
The second question was asked as this allows us to ascertain how many people are directly
employed by organisations that can only expect to benefit from an increase in elderly demographics.
It is perhaps only due to the way demographics have become distributed in recent decades (where
population pyramids have become more ‘top heavy’) that even allowed care homes, and
subsequently there employees, to come into fruition in the first instance. The mathematics is simple:
the higher the proportion of the population is the ‘oldest old’, the more people will be needed to
take care of them.
The third question is simply to determine how many additional years those who reach a certain age
need caring for, and by extension, how many years of potential employment each elderly individual
can provide.
The fourth and final question provides the information which is essential to this section of the
research. From the information provided here, this research will be able to derive just how much, in

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net figures, just how much the care home population contribute. If this figure is sizeable, then this
research can show that the elderly, who are now not only contributing directly through working
longer, are also contributing indirectly through providing jobs for the ‘independent’ population.
A full table of all data that was collated for these questions can be found in Appendix 1; the figures
referred to for the remainder of this section shall all be based on those figures, but will
predominantly be averages, rather than the entire data set.
The total number of residents that were said to be staying in the contacted care homes is 8,707,
which when scaled up to reach the total number of care homes needed to assess the situation
nationwide, means there are approximately 870,700 elderly people using care homes across
England. When multiplied again, it infers there will be approximately 1,036,500 using care home
across the UK. If we assume that everyone who falls into this category is at least over the age of
seventy five, then we can infer that almost a quarter (24%) of the this particular demographic of the
population is in a care home. As the ageing population continues to expand, it becomes obvious
that not only will this number increase in gross figures, but it will also increase in its percentage.
The implication that almost a quarter of those over seventy five shows highlights one thing; the
dependent are becoming an increasingly larger amount of our population. If, as the case is normally
perceived, these dependents are becoming a burden on society, and increasingly so, this is obviously
a bad thing. However, as this research intends to prove over the next few paragraphs is that the
direct opposite is true.
From the care homes that were contacted, the data collection discovered that some 12,787
members of staff were employed. By the same multiplication factors as used above, this indicates
there would be approximately 1,278,700 staff employed across England, and therefore 1,522,200
are employed by the care system in the entirety of the United Kingdom. Although this seems like a
high figure, It may be possible that certain staff members are duplicated, as they are in the employ
of so called ‘Care Groups’, rather than individual retirement homes, so a revised figure of
approximately 800,000 can be assumed for the purpose of examining the impact of the ageing
population. If we consider that the latest figures show the number of people in work is just short of
30 million people (29.81 million (Department of Work and Pensions, 2013)), this implies that the
care home sector alone, is responsible for almost 2.5% of all employment in the United Kingdom.

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Again, as with before, if the likelihood that the ageing population is going to continue to increase
year on year, then two things will occur: The dependent population ratio1
of the UK, which currently
stands at 66, will increase over time; and the amount of jobs therefore created, by both the increase
in the elderly population and the relative decrease of the working population will substantially
increase. This, in its own right, can only be beneficial to society as a whole, if a much higher
proportion of those able to work remain in work.
Table 2: Job availability and salaries at various care homes
The jobs that are created by the effect of the ageing population in this situation are also not low paid
jobs, when averaged out across the different fields, and according to their proper weighting. Table 2
demonstrates how this information was ascertained.
1
The dependent population ratio is the ratio of the population defined as dependent (the population aged 0-
19 and 65 and over) divided by the population 20-64, multiplied by 100 (OECD)
Managers
Deputy
Managers
Regional
Managers
Nurse Team
Leaders Nurses
Senior
Carers
Domestic
Assistants
Job 1 £21,680 £30,000 £60,000 £32,000 £26,220 £19,500 £12,500
Job 2 £30,000 £30,000 £75,000 £31,000 £27,300 £17,778 £11,600
Job 3 £33,000 £34,000 £70,000 £30,000 £32,175 £16,000 £15,000
Job 4 £39,000 £15,000 £80,000 £28,000 £24,000 £18,500 £14,700
Job 5 £35,000 £18,000 £65,000 £33,000 £31,200 £16,325 £17,500
Sub-Total £158,680 £127,000 £350,000 £154,000 £140,895 £88,103 £71,300
Average £31,736 £25,400 £70,000 £30,800 £28,179 £17,621 £14,260
Number of
Vacancies 283 95 9 51 611 86 73
Average*Vacancies £8,981,288 £2,413,000 £630,000 £1,570,800 £17,217,369 £1,515,372 £1,040,980
Overall Total
wages £33,368,809
Total Wages/Total
number of
Vacancies
£27,623

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Using job adverts found on carehome.co.uk, five jobs were chosen from each of the different
categories of job being offered. The reason five were chosen is to balance out the difference in
wages throughout the country, and as we can see form the table, wages vary substantially within
each of the individual roles. The average for each role was then found, and subsequently multiplied
by the number of vacancies the site had available at the time for each job role. This was to ensure
that the results weren’t unfairly skewed by the large salaries of regional managers for example, as
although their salaries are high, there are view of them compared to those tasked with the day to
day running of care homes. These figures where then combined together, and divided by the overall
total number of vacancies, produce the figure £27, 623. Given that the average UK wage is £26,500,
(BBC, 2012)the jobs that the care home sector provides are, on average, above that limit. So, not
only are there a vast number of jobs produced each year by the effect of the ageing population, but
they are jobs that pay above the national average.
Whilst on the subject of the monetary side of care homes, it is also worth noting how much the care
sector is worth as an overall sector within the British Economy. The fourth question that was asked
to all care homes contacted for the purposes of this research was ‘What is the weekly rate for one of
your residents?’ The data in Appendix 1 was sued for this, and when all figures obtained were
averaged out, it transpired that the average fee for a resident within a care home was £676 per
week. This works out to cost £35,152 per year per resident, and if we use the estimates provided
above, this would mean that the care of the elderly in residential care is an industry worth
approximately £36.5 billion each year. Clearly a very booming industry and one that is going to
continue to flourish as the population continues to age.
Conclusion
Although it may seem that the elderly are a burden on the employment market due to the
perception that they not only do not contribute themselves, but they also force a burden on others.
However, as this section of the research has shown, that is unequivocally not the case. New
legislation means that the elderly are able to work longer themselves, and this is a trend which is not
only irreversible, but very likely to continue increasingly. As the population continues to age, those
who were once considered to be the ‘dependent’ population will become part of the ‘independent’
population as time goes by. It has also become apparent that the label of ‘dependent population’
may have become slightly defunct. Although the ‘older old’ may be reliant or ‘dependent’ on those
younger than they are to provide care for them, but considering in doing this, they supply jobs for
almost one twentieth of the United Kingdom’s workforce, the dependency in mutual. Therefore, in
terms of employment, the ageing population is much more a benefactor then a burden.

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Transport
This section of this research focusses on one particular area of transportation; the use of public
transport, primarily buses, by the elderly generation. As with the previous two topics that have been
analysed throughout this project, the topic of transportation when the elderly concerned is an
‘iceberg’ topic; on the face of it the perception is one thing, but there is a lot more to the topic that
meets the eye.
Due to both public and personal experience, this section of the research shall focus solely on the use
of buses by the elderly, for examining the impact the ageing population has on transportation, and
this is for a number of reasons. Firstly, it is commonly observed that of the three principle methods
of public transportation (buses, taxis and trains), that buses are most commonly used by the older
demographic of the population. This is confirmed in a recent report, ‘Missed Opportunities’,
conducting by the older people’s charity, AgeUK (Age UK, 2013).
One could not be blamed for assuming, that given the propensity in which the elderly use buses and
appear to not have to pay for their travel, that charging the elderly would either lower fares for the
rest of travellers using the services, or vastly improve the overall service of the bus companies for
the rest of us due to an increase in budget. However, given how the ‘older person’s bus pass’ is
funded by central government, is this assumption based in any evidence, or merely in prejudice.
To establish the facts on whether or not the ageing population has a positive or negative effective on
public transport, a few brief questions were sent to various national and regional bus companies.
Unfortunately, the responses were limited, but of the two responses received, both proved useful
for cross-comparison purposes. The first response was from the Confederation of Passenger
Transport (CPT) which represents the entire industry nationwide, and the second was from the Chief
Executive of East Yorkshire Motor Services Ltd (EYMS), which represents a regional branch of the
industry. The combination of the answers given by these two branches should help determine the
impact, be it positive or negative, the impact an ageing population has had at both a national and
local level. What was also useful for research purpose was that the regional operator had seen the
answers given by the CPT, so could add further comment from a more localised level
Both respondents supplied answers to the following five questions
1. How many people using your services, are in receipt of a subsidised bus pass due to their age
2. How much in remuneration does your company received from central government to
compensate for this

16
3. How much in remuneration does your company receive form any local government schemes
that are in place?
4. Could your company continue to operate the service it does now, if such funding was
withdrawn?
5. If such funding were withdrawn, would your company likely have to charge an additional fee
for the elderly to travel on such services?
The answer to these questions and the implied implications of those answers are as follows. For the
purpose of this research, the answers of both the CPT and EYMS have been merged together.
The number of bus passes issued in England on ground of age in 2010/11 was 8,754,000. This figure
increased to 8,846,000 in 2011/12, and then to 8,848,000 in 2012/13. In the East Riding of Yorkshire
equates 76,000 of these. The national figures simply confirm that the epidemic of population is
occurring. What is interesting, however, is the anecdote that accompanied the regional figures that
stated that pass holders within this region accounted for 40% of the total number of journeys taken
last year. According to the ONS, the total population of the East Riding of Yorkshire (the area served
by EYMS) is 590,800, which means that 40% of the journeys taken on EYMS were completed by just
12% of the population. If the economics do not demonstrate more favourable information, this
statistic is very stark in its admission that the ageing population have a poor impact for those wishing
to use public transportation.
As far as direct remuneration from central government is concerned, the answer supplied by both
the local and national operators was the same: Nothing. The funding comes from Travel
Concessionary Authorities (TCA), which are set up with individual local authorities, who then receive
funding from the Department for Communities and Local Government, but as block grant. The CPT
did note that some would say that this funding is inadequate, and figure 6 allows us to better
understand why this would be said.

17
Figure 6: Spending cuts by Government department since 2010/11 (Reuben, 2013)
So, if no direct funding is coming from the DCLG, and the indirect funding the department is giving
the TCA’s is being slashed, it becomes apparent that the continued use of subsidised travel by the
elderly is an unsustainable situation to be in.
Local authorities do have schemes in place to offer some level of remuneration, but there are also
issues here. EYMS received £7.8 million in local authority subsidy in the financial year 2008/2009,
but this has since reduced by almost a £1 million to £6.9 million in the financial year 2013/14. Again,
all this exemplifies is that the ageing population is continuing to increase, and yet the finance to
allow the situation regarding transportation to continue as it is, is decreasing. The local situation also
presents a situation which is unstainable.
The CPT’s answer to the fourth question continued to exemplify the emerging trend; that when
public transportation is concern, the ageing population is a burden, not a benefit. The CPT state that
due to it being a statutory requirement for bus operates to give free rides to certain customers (the
elderly and disabled), the funding from the TCA’s is used to make up the short fall of if these
customers. Therefore, the CPT predict that if this funding was slowed down or stopped altogether,

18
timetables would likely be reduced, and the possibility that smaller buses would have to be used to
accommodate for the potential loss of custom. EYMS also agree that loss of custom would be
sustained if this money was withdrawn, stating that even if certain pensioners would rather pay then
lose their vital bus services, some would outright refuse to pay, which would result in the reductions
described by the CPT.
Finally, the CPT admitted that if the funding stream was withdrawn (which, as a result of the ever
shifting demographics towards the elderly, may become a possibility) then elderly people would be
charged in line with everyone else. As noted above, the problem with removing the funding that the
bus operators receive from the TCA’s is that even less money will come to bus operators from the
elderly people who will no longer travel on buses once they have to pay for them.
Also in their answer to the fifth question posed, the CPT (who represent all bus operators
nationwide) have placed on the record that the current set up, where the TCA’s reimburse them for
their supposedly incurred costs from transporting the elderly for free, is not adequate. They have
stated then when costs increase (and presumably also when the number of none paying travellers
increase) the only way under the current arrangements for them to continue to run for profit, is to
charge more to those currently paying fees. Issues of this nature have even got to the stage where
certain routes have been taken off the regular timetables due to the lack of people on the service
who are paying.
From all of the answers that have been supplied by the operators, both nationally and locally, it is
clear that not only is the current system unstainable, but an ageing population will only exacerbate
the problem. If bus operators feel that the system funds them inadequately now, and the only way
to offset those inadequacies is by charging fee paying customers more, then the system is clearly
unsustainable. This is one area of public policy where the ageing population has caused a negative
impact, and will only continue to get worse as the phenomenon continues.
Health
The final general policy area chosen to be examined for the purposes of this research was health. It
is a well-known fact that we age our bodies become more susceptible to diseases, and unable to
withstand what they once could. As a result, it has been noted that the NHS will be one of our public
services which suffers heavily from having to cope with the strains of an ageing population. Seeing as
the overall topic of health has been touched upon in the section of this research concerning
employment, this section will be shorter than others.

19
Much in the same way then when boarding a crowded bus, one notes a lot of elderly people, the
same is true when one enters a GP’s surgery. As it is with public transportation, the public
perception is easily backed up with available statistics. The ONS have stated that as far as GP’s
surgeries are concerned, the over seventy fives, who make up 8% of the population, take almost
three times as much of the primary care work load than those aged between thirty and forty (ONS,
2012). So despite making up almost double the percentage of the population (15%), the younger of
these two demographics are losing out on potential health care provision. This is obviously a way in
which the ageing population
The House of Lords Select Committee on Public Service and Demographic Change recently produced
a report entitled ‘Ready for Ageing (Select Committee on Public Service and Demographic Change,
2013)’, and one of the key factors which they assessed was health. Following extensive research and
hearings, the committee’s Chairman, Lord Filkin, concluded that;
“The Committee has concluded that the current healthcare system is not delivering good
enough healthcare for older people and is inefficient; there is an urgent need to change the
current system to provide better healthcare more efficiently. The NHS is facing a major
increase in demand and cost consequent on ageing and will have to transform to deal with
this. Because of this rising demand, without radical changes in the way that health and social
care serve the population, needs will remain unmet and cost pressures will rise inexorably”
(Filkin, 2013)
We can see from this admission alone, that the current healthcare system we have is not only failing
the ageing population, but failing future generations by also taking up too much of resources.

20
Conclusion
To conclude this research, it would be fitting to reflect on both the aims and the hypothesis that
were set out in the beginning. It has become clear, that when the four factors examined throughout
this piece of research are combined it becomes clear that the benefits of the ageing population are
only slightly outweighing the burdens, and it comes down to which side acts firsts as to whether or
not this trend will continue.
If business begins to act first, then the power of the Grey Pound will become stronger than ever. If
more people become involved in the care sector, then this too will provide further employment for
the increasingly dwindling ‘independent population’. Both of these plausible outcomes will
demonstrate that the benefits of an ageing population can be harnessed, and used to stimulate the
economy, rather than stagnate it.
However, if the above scenarios become wasted opportunities, and the situation that is current
occurring in our underfunded transport system, and our overburdened NHS continue to see no
reform, then the phenomenon of the ageing population has the potential to bring society to its
knees.

21
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