ILC-UK and the Actuarial Profession debate: Changing the perception of retirement - Edinburgh

Changing the perceptionof retirement

9 February 2012

This event is kindly supported by Swiss Re

Welcome

Stewart RitchiePast President of the Faculty of Actuaries


Who will care for the elderly?

Professor Robert RaesideEdinburgh Napier University


Who will care for the elderly?

LC-UK and the Actuarial Profession debate: Changing the perception of retirement

Professor Robert Raeside

Employment Research Institute

Edinburgh Napier University

Email: [email protected]

Trends

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

5

10

15

20

25

EU (27 countries)

Germany

Italy

United Kingdom

Eurostat Data

Proportion of Population over 65

EU (27

coun

tries

)

Czech

Rep

ublic

Germ

any

Irelan

dSpa

inIta

ly

Nethe

rland

s

Poland

Sweden

0

20

40

60

80

Employment Rate of older workers (55-64 yrs)

Country

%

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Population_pyramids,_EU-27,_2010_and_2060_(1)_(%25_of_the_total_population).png&filetimestamp=20111130143557

UK Situation

0

5,000

10,000

15,000

20,000

25,000

30,000

19

71

19

76

19

81

19

86

19

91

19

96

20

01

20

06

20

11

20

16

20

21

20

26

20

31

Nu

mb

er

of

ho

us

eh

old

s (

Th

ou

sa

nd

s)

one person

other multi-person

lone parent

cohabiting couple

married couple

Distribution of Houses by Occupant Age

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Under25

25 -34

35 -44

45 -54

55 -64

65 -74

75 &over

%

All houses 2006

All houses 2031

One person houses2006

One person houses

Housing Trends

Basic Premises

1. As populations age and extended families become less, people become more dependent on social contact with friends.

2. Loneliness and social isolation are associated with poorer mental and physical wellbeing

Percentage change in social support

Male 65-79

Female 65-79

Males 80+

Female 80+

Someone outside household 1.5 -1.2 9.2 0.6Is there someone who will listen 1.1 4.1 -8.5 7.1Is there someone who will help in a crises 1.8 1.7 1.1 5.7Is there someone you can relax with 4.9 3.1 -1.3 6.2Anyone who really appreciates you 2.3 0.3 -3.3 7.3Anyone you can count on for comfort 4.4 1.9 -1.1 5.1Frequency of talking to neighbours 0.5 1.4 1.3 -3.8Frequency of meeting people 0.6 0.4 -0.7 -2Average 2.1 1.4 -0.4 3.3

Who gives support?Percentage change since 1997

65-79 80*

Male

nothing written in 11 8partner 45 30child 15 43sibling 4 2

other relative 5 4friend 22 12

Female

nothing written in 7 9partner 22 6child 26 46sibling 11 5

other relative 6 13friend 29 21

noth

ing

writ

ten

in

part

ner

child

sibl

ing

othe

r re

lativ

e

frie

nd

noth

ing

writ

ten

in

part

ner

child

sibl

ing

othe

r re

lativ

e

frie

nd

Male Female

-60

-50

-40

-30

-20

-10

0

10

20

30

40

65-79

80+

Overall Satisfaction with Life

3.5

4

4.5

5

5.5

6

6.5

7

Mal

e65

-79

Fem

ale

65-7

9

Mal

e80

+Fe

mal

e80

+

Mal

e65

-79

Fem

ale

65-7

9

Mal

e80

+Fe

mal

e80

+

1997 2007

Mean Satisfaction

UCL

LCL

Mean

RegressionDependents

Overall Life Satisfaction General Happiness

Losing confidence Ability to Face Problems

Unhappy or Depressed

Independent Variables

Support – PC formed out of the five support variables

Frequency of meeting people

Support Person – Partner, Child or Friend Dummies

Control Variables

Health status over last 12 months

Financial status

Housing tenure

Overall Satisfaction with Life

65-79 yr olds 80+ yr olds

Variable Coefficient Standard Error P Value Coefficient

Standard Error P Value

(Constant) 7.079 .224 .000 7.275 .358 .000

frequency of talking to neighbours

.017 .057 .772 .077 .086 .371

frequency of meeting people .061 .065 .347 -.092 .098 .349

Support .182 .048 .000 .339 .089 .000

partner .163 .124 .188 -.044 .270 .870

child .420 .154 .007 .007 .248 .992

friend .030 .142 .833 .183 .319 .567

health status over last 12 months

-.500 .051 .000 -.739 .082 .000

financial situation -.199 .053 .000 .017 .097 .858

Males

Adjusted R2 24.7% 36.6% (Constant) 7.178 .221 .000 6.556 .384 .000

frequency of talking to neighbours

.256 .055 .000 .316 .078 .000

frequency of meeting people -.027 .063 .663 -.124 .106 .245

Support .140 .054 .009 .188 .082 .023

partner .329 .137 .017 1.542 .385 .000

child -.032 .132 .810 -.078 .200 .695

friend -.067 .128 .602 .370 .240 .123

health status over last 12 months

-.355 .051 .000 -.506 .090 .000

financial situation -.300 .054 .000 .079 .102 .442

Females

Adjusted R2 20.8% 18.8%

Findings

• Low explanatory power• Little evidence of the importance of who

gives support – but support is important• Partner is positive while friend appears a

negative impact!

Conclusions

• Populations are ageing and the extended family is decreasing• Social support is very important• Seems more close family support• Little reliance on friends• Smaller networks but level of support is high• Large multipurpose surveys might not be reaching the problem

Survey of Older People in Edinburgh

Mobility

Being in a social network is key

Importance of Cars

0 20 40 60 80

Al l Ages

17-24

25-59

60-69

70+

Al l Ages

17-24

25-59

60-69

70+

age

% of tri ps

Bus and CoachCar PassengerWal kCar Dri ver

Difficulty in usingGender Age Bus Taxi Train Car

Male60-69 yrs 18.87% 5.99% 13.76% 6.44%

70+ yrs 26.01% 10.30% 19.68% 10.14%

Female 60-69 yrs 24.29% 9.65% 18.53% 9.46%70+ yrs 40.32% 16.92% 25.83% 15.41%

0102030405060708090

100

1990 1995 2000 2005 2010Year

%

Mal e 61 - 69Mal e 70+Femal e 61 -69Femal e 70+

Trends in Driving License holding

Females

Males

Helen ChungSwiss Re


A time to dance: health systems for active retirement

A time to dance: Health systems for longer livesHelen Chung MBBS MSc AIA, Head of Medical Research, Swiss Re

ILC-UK and Actuarial Profession debate, Edinburgh, 9 February 2012

Helen Chung | Head of Medical Research, Swiss Re | ILC-UK, Edinburgh, 9 February 2012 20

Healthy and active longer lives are a reality for some, and could be for more

Source: Chelmsford Borough Council, Older People's calendar: Tea dance in the Banqueting Room at Hylands House


for Health Systems:

– maintaining good health for longer

– staving off ill health

– treating and living with disease

Social

– retirement communities

– communities suitable to remain and retire in

Financial

– affording a healthy longer life

– when (and if) to retire?

Challenges


Individuals are not saving adequately

The average annual amount individuals would have to save in order to achieve a retirement income of 70% of salary (selected countries), EUR

Source: Aviva, 2010

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

United Kingdom

GermanyIreland France Spain Czech Republic

Poland Italy Turkey Hungary


Can morbidity be compressed?

Source: Fries, Booth & Chakravarty, Journal of Aging Research, 2011


chronic health problems have had time to accrue over a lifetime

multiple chronic diseases are common

physiological and social vulnerabilities are greater at oldest ages

increased risk of influenza, disability and falls

slower recovery

reduced mobility hampering access to care

higher personal care needs

Longer lives come with altered healthcare and prevention needs

Source: WEF 2012: Global Aging: Peril or Promise?


Health systems must evolve in response to the ageing of society to optimise health across the full life course

Greater emphasis on prevention and public health

Moving from hospital, acute care and institutional care to community-based care

Shared responsibilities increase effectiveness and efficiency: individuals to be partners in own care

Integration absolutely key: 'a coordinated continuum'

Education for health professionals to adapt

New models to draw on evidence

Changing health systems for changing needs

Source: WEF 2012: Global Aging: Peril or Promise?


Change your views on retirement

Source: Ocean Garden's Retirement Village, Perth, Australia. www..oceangardens.com.au and iStockphoto/Georgy Markov

Thank you


Legal notice

©2012 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivatives of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re.

Although all the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial and/or consequential loss relating to this presentation.

George P MacKenzie Registrar General and Keeper of the Records


Scotland’s demography – an aging population

National Records of Scotlandpreserving the past; recording the present; informing the future

Scotland's demography - an ageing population

George MacKenzie Registrar General and Keeper of the Records

ILC-UK and the Actuarial Profession debate: Changing the perception of retirement - Edinburgh - 9th February 2012


Overview of presentation

• Introduction • Scotland’s current and future demographic

trends• Scotland’s ageing population• Households• Questions


Estimated population of Scotland on 30 June 2010 was 5,222,100

Increase of 28,100 on 2009, highest since 1977

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,0001

85

5

18

62

18

69

18

76

18

83

18

90

18

97

19

04

19

11

19

18

19

25

19

32

19

39

19

46

19

53

19

60

19

67

19

74

19

81

19

88

19

95

20

02

20

09

Year

Nu

mb

er

of

Pe

op

le

1857 passes 3m

Fastest percentage increase 1876 and 1878

1890 passes 4m

1900 largest rise

1912 first estimated fall

WW2*

1939 passes 5m for the first time

1974 5.4m highest ever level?

1924 largest and sharpest fall

1971 largest and fastest post WW2 rise


Births, actual1 and projected2, Scotland, 1951-2035

0

20

40

60

80

100

120

1951 1960 1970 1980 1990 2000 2010 2020 2030

Year

Pe

rso

ns

('0

00

s)

Projected2

1 calendar year2 2010-based mid-year projections


Deaths in Scotland – main causes0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000

Cancer

Coronary / ischaemic heart disease

Stroke / cerebrovascular disease

Respiratory system diseases

Other circulatory system diseases

Digestive system diseases

Mental and behavioural disorders

Accidents

Nervous system diseases

Genitourinary system diseases

2000 2010


Life expectancy at birth, Scotland, 1981-1983 to 2008-2010

0

10

20

30

40

50

60

70

80

90

19

81

-83

19

82

-84

19

83

-85

19

84

-86

19

85

-87

19

86

-88

19

87

-89

19

88

-90

19

89

-91

19

90

-92

19

91

-93

19

92

-94

19

93

-95

19

94

-96

19

95

-97

19

96

-98

19

97

-99

19

98

-00

19

99

-01

20

00

-02

20

01

-03

20

02

-04

20

03

-05

20

04

-06

20

05

-07

20

06

-08

20

07

-09

20

08

-10

Year

Ag

e

female male


Life expectancy at birth, 95% confidence intervals for Council areas, 2008-2010

(Males and Females)

70 72 74 76 78 80 82 84 86

Glasgow CityInverclyde

West DunbartonshireRenfrewshire

DundeeEilean Siar

North LanarkshireNorth AyrshireEast Ayrshire

ClackmannanshireSouth Lanarkshire

West LothianAberdeen City

FifeSouth Ayrshire

FalkirkHighland

MidlothianDumfries & Galloway

MorayArgyll & Bute

Edinburgh, City ofShetland Islands

East LothianOrkney Islands

Scottish BordersAngusStirling

AberdeenshireEast Renfrewshire

Perth & KinrossEast Dunbartonshire

Years

SCOTLAND

MALE FEMALE

Ordered by lowest male life expectancy to highest


Life expectancy at birth, 95% confidence intervals for Scottish Index of Multiple Deprivation 2009 Deciles, 2008-

2010 (Males and Females)

65 67 69 71 73 75 77 79 81 83 85

1

2

3

4

5

6

7

8

9

10

Years

MALE FEMALE

SCOTLAND

Leastdeprived

Mostdeprived

Ordered by lowest male life expectancy to highest


Healthy life expectancy

• Levels for women and men have been gradually increasing since 1980.

• In 2010 healthy life expectancy for women was 61.9 years, whilst levels for men were 59.5 years. Average levels of healthy life expectancy decreased by 0.7% between 2009 and 2010.


Deaths, Scotland, actual1 and projected2, 1951-2035

0

10

20

30

40

50

60

70

1951 1960 1970 1980 1990 2000 2010 2020 2030

Year

Pe

rso

ns

('0

00

s)

Projected2

1 calendar year2 2010-based mid-year projections


Migration


Net migration, Scotland, 1951-2035

-50

-40

-30

-20

-10

0

10

20

30

40

50

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Year

Pe

rso

ns

('0

00

s)

Projected1

12010-based projections


Population, Scotland, actual and projected, 1951-2035

3,000

3,500

4,000

4,500

5,000

5,500

6,000

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Year

Per

son

s ('0

00s)

Actual 2010-based 2008-based 2006-based


Scotland’s ageing population

1861

300 200 100 0 100 200 300

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90+

Ag

e

Population (000's)

Females

Males

1931

300 200 100 0 100 200 300

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90+

Ag

e

Population (000's)

Females

Males

1961

300 200 100 0 100 200 300

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90+

Ag

e

Population (000's)

Females

Males

2001

300 200 100 0 100 200 300

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90+

Ag

e

Population (000's)

Females

Males

1861 2010

2021

2035

Projected

Latest estimateCensus results

1911

1961

2001

2010

60000 40000 20000 0 20000 40000 60000

0

10

20

30

40

50

60

70

80

90+

Ag

e

Persons

Male Female

2021

60000 40000 20000 0 20000 40000 60000

0

10

20

30

40

50

60

70

80

90+

Ag

e

Persons

Male Female

2035

60000 40000 20000 0 20000 40000 60000

0

10

20

30

40

50

60

70

80

90+

Ag

ePersons

Male Female


Projected changes by age group over the next 25 years

• Children (0-15): 3% increase

• Working age: 7% increase

• State pension age: 26% increase

• 75+ : 82% increase

• 85+ : 147% increase


Dependents1 per 100 working age population, Scotland, actual and projected, 1951-2035

1 Between 2010 and 2020 the state pension age for women will rise from 60 to 65 and then between 2024 and 2026 will rise for both men and women to 66, and rises again to 68 by 2046.

50.0

55.0

60.0

65.0

70.0

75.0

80.0

1951 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Year

Dep

end

ents

per

100

wo

rkin

g a

ge

Actual 2010-based 2008-based 2006-based


Pensioners, comparing proposed changes to SPA

1,000,000

1,050,000

1,100,000

1,150,000

1,200,000

1,250,000

1,300,000

1,350,000

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034

Year

Peo

ple

of

pen

sio

nab

le a

ge

Proposed Pensioners Original Pensioners


Comparing pensionable age population, if SPA became 70+ by 2035 and current changes

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2010 2015 2020 2025 2030 2035

Year

Per

son

s

People of pensionable age if 70+ in 2035 Current changes to SPA


As well as producing the principal projections, there are also a series of variant projections.

These are based on different plausible assumptions about fertility, mortality and

migration giving a more complete picture of what we might expect to see in the future.


Actual and projected total population, Scotland, under the 2010-based principal and selected

variant projections, 1981-2085

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Year

Po

pu

lati

on

(M

illi

on

s)

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0HP = High populationHM = High migrationHF = High fertilityHL = High life expectancyP = Principal projectionLL = Low life expectancyLF = Low fertilityLM = Low migrationNC = Natural change onlyLP = Low population

HP

HMHF

HL

P

LLLFLM

NCLP


Average age of Scotland’s population under the 2010-based principal and selected variant

projections, 2010-2035

39

40

41

42

43

44

45

46

47

2010 2015 2020 2025 2030 2035Year

Ag

e in

yea

rs

Natural change

Low population

Low fertility

Low migration

High life expectancy

Principal

Low life expectancy

High migration

High fertility

High population


Household change

• Household sizes are falling, and more people are living alone.

• This means that the number of households is increasing much faster than the population.

• Increase in elderly population (who are more likely to live alone).

• More people live alone in urban areas, and in more deprived areas.


Changes in household types

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1 adult 2 adults 1 adult withchildren

2+ adults withchildren

3+ adults

Type of household

Nu

mb

er o

f h

ou

seh

old

s

1981

2008

2033


Projected percentage of people living alone, 2033

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

16-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90+

Age group

Per

centa

ge

of peo

ple

MalesFemales


Questions?

For more information please contact:

NRS Statistics Customer Servicesemail: [email protected]: 0131 314 4299

Or look at our website www.gro-scotland.gsi.gov.uk

http://www.gro-scotland.gsi.gov.uk/


Extra information!


Population increase, comparing selected variants with natural change only projection,

2015-2035

0

100

200

300

400

500

600

700

800

900

2015 2020 2025 2030 2035

Year

Ad

dit

ion

al p

op

ula

tio

n (

000s

)

Low Migration Principal High Migration


Births by mother’s country of birth

All countries of birth

United Kingdom, Isle of Man,

Channel IslandsNon-UK

Irish Republic including Ireland,

part not stated

Other European Union

Commonwealth Other countries

2004 53,957 49,738 4,219 230 844 1,822 1,3192005 54,386 49,711 4,675 272 996 1,942 1,4622006 55,690 50,468 5,222 257 1,326 2,112 1,5252007 57,781 51,431 6,350 303 2,085 2,265 1,6922008 60,041 52,434 7,607 321 2,793 2,657 1,8322009 59,046 51,062 7,984 276 3,032 2,690 1,9862010 58,791 50,615 8,176 297 3,197 2,634 2,048


Births in Scotland, by mother’s country of birth, 2004-2010

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2004 2005 2006 2007 2008 2009 2010

Year

Bir

ths

Irish Republic including Ireland, part not stated Other European Union Commonwealth Other countries


Comparisons with selected European

countries


Projected percentage population change in selected European countries, 2010-

2035

Source: ONS and Eurostat

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Bul

garia

Latv

ia

Lith

uani

a

Rom

ania

Ger

man

y

Est

onia

Hun

gary

Pol

and

Mal

ta

Por

tuga

l

Slo

vaki

a

Cze

ch R

epub

lic

Gre

ece

EU

27

Slo

veni

a

Net

herla

nds

Aus

tria

Fin

land

Den

mar

k

Italy

Sco

tland

Fra

nce

Spa

in

Nor

ther

n Ir

elan

d

Liec

hten

stei

n

Wal

es

Sw

eden

Bel

gium

Icel

and

Sw

itzer

land

Uni

ted

Kin

gdom

Eng

land

Nor

way

Irel

and

Cyp

rus

Luxe

mbo

urg

Per

cen

tag

e ch

ang

e


Assumptions about the 2010-based principal and nine variant projections for Scotland

Fertility Life expectancy Life expectancy MigrationMales (2035) Females (2035)

1 Principal projection 1.70 80.9 85.1 +17,500Standard 'single component' variants2 High fertility 1.90 80.9 85.1 +17,5003 Low fertility 1.50 80.9 85.1 +17,5004 High life expectancy 1.70 83.3 86.7 +17,5005 Low life expectancy 1.70 78.4 83.5 +17,5006 High migration 1.70 80.9 85.1 +26,0007 Low migration 1.70 80.9 85.1 +9,000Combination variants8 High population 1.90 83.3 86.7 +26,0009 Low population 1.50 78.4 83.5 +9,000Special case scenario10 Zero migration 1.70 80.9 85.1 0


Comparisons with other UK countries

http://www.google.co.uk/imgres?imgurl=http://www.clker.com/cliparts/4/f/5/6/1223613091548471395shokunin_United_Kingdom_map.svg.hi.png&imgrefurl=http://www.clker.com/clipart-24410.html&usg=__gJmSpObkQpvUJbDJPIPDvxMqGso=&h=597&w=384&sz=21&hl=en&start=2&zoom=1&tbnid=xx9gFTD_oCI21M:&tbnh=135&tbnw=87&ei=brymTqeOEMru-gaJpvSuDw&prev=/search?q=UK+map+clipart+free&hl=en&sa=N&gbv=2&tbm=isch&itbs=1


• UK population is projected to increase from 62.3 million in 2010 to

73.2 million in 2035• An 18% rise (compared to Scotland’s 10%)


UK countries population growth, 2010-2035

95

100

105

110

115

120

2010 2015 2020 2025 2030 2035

Year

Ind

ex

(20

10 =

100

)

England Northern Ireland Wales Scotland


Population Pyramids of Scotland, 1981-2035

60000 40000 20000 0 20000 40000 60000

0

10

20

30

40

50

60

70

80

90+

Ag

e

Persons

Male Female

1981

Data for 2011 to 2035 is from the 2010-based National Population Projections. Data prior to this is from the NRS mid-year population estimates.



60000 40000 20000 0 20000 40000 60000

0

10

20

30

40

50

60

70

80

90+

Ag

e

Persons

Male Female

1991




60000 40000 20000 0 20000 40000 60000

0

10

20

30

40

50

60

70

80

90+

Ag

e

Persons

Male Female

2001




60000 40000 20000 0 20000 40000 60000

0

10

20

30

40

50

60

70

80

90+

Ag

e

Persons

Male Female

2011




60000 40000 20000 0 20000 40000 60000

0

10

20

30

40

50

60

70

80

90+

Ag

e

Persons

Male Female

2021




60000 40000 20000 0 20000 40000 60000

0

10

20

30

40

50

60

70

80

90+

Ag

e

Persons

Male Female

2035



Estimated net migration, Scotland, 1951-2010

-50

-40

-30

-20

-10

0

10

20

30

40

19

51

-19

52

19

54

-19

55

19

57

-19

58

19

60

-19

61

19

63

-19

64

19

66

-19

67

19

69

-19

70

19

72

-19

73

19

75

-19

76

19

78

-19

79

19

81

-19

82

19

84

-19

85

19

87

-19

88

19

90

-19

91

19

93

-19

94

19

96

-19

97

19

99

-20

00

20

02

-20

03

20

05

-20

06

20

09

-20

10

Year to 30 June

Per

son

s ('

000s

)


Migration summary:2009-2010

In Out Net

Rest of UK1 47,000 43,500 3,500Overseas 46,100 24,600 21,500

Total 2 93,100 68,100 24,900


Where are overseas migrants coming from?

• ? Roughly:

In(08-09)

Out(08-09)

EU15 40% (35) 20% (40)

A8 + A2 15% (10) 10% (10)

Commonwealth 25% (30) 35% (30)

Other 20% (30) 35% (20)

• About 25% of overseas in-migrants are British citizens

• About 50% of overseas out-migrants are British citizens


Migration assumptions• From 2016-17 there is projected to be an annual net

gain of 17,500 people to Scotland• +8,500 from rest of UK• +9,000 from overseas

• Higher net inflows projected for first 6 years of the projections, reflecting the recent (historically high) levels of in-migration, in particular, A8 migration

• Inflows from Eastern European accession countries (A8) assumed to have a net 0 from 2016-17


Net migration and natural change, estimated and projected, 1951-2035

-50

-40

-30

-20

-10

0

10

20

30

40

50

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Year

Pe

rso

ns

('0

00

s)

Projected1

12010-based projections


Scotland’s Age Specific Fertility 1983-2010

0

20

40

60

80

100

120

140

1983 1988 1993 1998 2003 2008

Year

Bir

ths

per

1,0

00

wo

men

30-34

20-24

35-39

Under 20

40+

25-29


For Scotland fertility rates are assumed to..

• continue to increase for women in their 40s• remain stable for women in their 30s• and fall slightly for women in their 20s• the Total Fertility Rate is projected to remain

fairly stable until 2012 before falling to the long-term level


Children (0-15)

• 0.91 million in 2010• Rises to peak of 0.97 million in 2023• 0.94 million in 2035• A increase of 3% over the 25 years

http://www.google.co.uk/imgres?imgurl=http://www.freeclipartpics.com/images/children.gif&imgrefurl=http://www.freeclipartpics.com/free-birthday-clip-art/&usg=__u3PXvrt7x0QixfY0wxlHKzOQC-U=&h=141&w=175&sz=7&hl=en&start=2&zoom=1&tbnid=dUPc6WkdFTjUjM:&tbnh=81&tbnw=100&ei=obqmTuz4FMPD8QPZl8jYDw&prev=/search?q=children+clipart+free&hl=en&gbv=2&tbm=isch&itbs=1


Working Age

• 3.27 million in 2010• Rises to peak of 3.50 million in 2026• Falls slightly to 3.46 million in 2033• Rises to 3.50 million in 2035• An increase of 7% over 25 years• Takes into account changes in state pension

age

http://www.google.co.uk/imgres?imgurl=http://www.free-clipart-pictures.net/free_clipart/construction_clipart/construction_clipart_worker.gif&imgrefurl=http://www.free-clipart-pictures.net/construction_clipart.html&usg=__b6N61cXs3L0kvJU_ZXuDLjahgUQ=&h=200&w=148&sz=6&hl=en&start=4&zoom=1&tbnid=dbKbJGz6_oJ97M:&tbnh=104&tbnw=77&ei=ZLumTrmZIIiM8gOv7fypDw&prev=/search?q=worker+clipart+free&hl=en&sa=N&gbv=2&tbm=isch&itbs=1

http://www.google.co.uk/imgres?imgurl=http://www.pureclipart.com/clipart/briefcase.gif&imgrefurl=http://www.pureclipart.com/briefcases-clipart.php&usg=__eVH5phfbODmllLesRwOEaVxJiP0=&h=120&w=68&sz=3&hl=en&start=3&zoom=1&tbnid=OqGvW-kED-dyGM:&tbnh=88&tbnw=50&ei=ALymTq7LMIam8gOF7dGlDw&prev=/search?q=briefcase+clipart+free&hl=en&sa=N&gbv=2&tbm=isch&itbs=1


Pension Age

• 1.04 million in 2010• 1.32 million in 2035• An increase of 26%• Takes into account changes in state pension

age

http://www.google.co.uk/imgres?imgurl=http://us.cdn2.123rf.com/168nwm/clairev/clairev1012/clairev101200071/8528700-cartoon-grandma-sitting-in-armchair--vector-illustration.jpg&imgrefurl=http://www.123rf.com/clipart-vector/pensioner.html&usg=__egWleNmrDFgbazv_g6_cN1Uxm0w=&h=168&w=157&sz=13&hl=en&start=6&zoom=1&tbnid=ISNURb4hdDm-fM:&tbnh=99&tbnw=93&ei=ILumTqC2Ic3B8QP6pom7Dw&prev=/search?q=pensioners+clipart+free&hl=en&sa=N&gbv=2&tbm=isch&itbs=1


Dependency Ratios

As the age structure of Scotland’s population changes, the dependency ratio – the ratio of

people aged under 16 and those of pensionable age per 100 people of working

age – is set to change as well

http://www.google.co.uk/imgres?imgurl=http://www.freeclipartpics.com/images/children.gif&imgrefurl=http://www.freeclipartpics.com/free-birthday-clip-art/&usg=__u3PXvrt7x0QixfY0wxlHKzOQC-U=&h=141&w=175&sz=7&hl=en&start=2&zoom=1&tbnid=dUPc6WkdFTjUjM:&tbnh=81&tbnw=100&ei=obqmTuz4FMPD8QPZl8jYDw&prev=/search?q=children+clipart+free&hl=en&gbv=2&tbm=isch&itbs=1

http://www.google.co.uk/imgres?imgurl=http://us.cdn2.123rf.com/168nwm/clairev/clairev1012/clairev101200071/8528700-cartoon-grandma-sitting-in-armchair--vector-illustration.jpg&imgrefurl=http://www.123rf.com/clipart-vector/pensioner.html&usg=__egWleNmrDFgbazv_g6_cN1Uxm0w=&h=168&w=157&sz=13&hl=en&start=6&zoom=1&tbnid=ISNURb4hdDm-fM:&tbnh=99&tbnw=93&ei=ILumTqC2Ic3B8QP6pom7Dw&prev=/search?q=pensioners+clipart+free&hl=en&sa=N&gbv=2&tbm=isch&itbs=1

http://www.google.co.uk/imgres?imgurl=http://www.free-clipart-pictures.net/free_clipart/construction_clipart/construction_clipart_worker.gif&imgrefurl=http://www.free-clipart-pictures.net/construction_clipart.html&usg=__b6N61cXs3L0kvJU_ZXuDLjahgUQ=&h=200&w=148&sz=6&hl=en&start=4&zoom=1&tbnid=dbKbJGz6_oJ97M:&tbnh=104&tbnw=77&ei=ZLumTrmZIIiM8gOv7fypDw&prev=/search?q=worker+clipart+free&hl=en&sa=N&gbv=2&tbm=isch&itbs=1


75 +

• 0.41 million in 2010• 0.74 million in 2035• An increase of 82%


Estimated population of Scotland on 30 June 2010 was 5,222,100

Increase of 28,100 on 2009, highest since 1977

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1951 1960 1970 1980 1990 2000 2010 2020 2030

Year

Pe

rso

ns

('0

00

s)

Retirement in flux

David SinclairILC-UK


The International Longevity Centre-UK is an independent, non-partisan think-tank

dedicated to addressing issues of longevity, ageing and population change.

Retirement in fluxChanging perceptions of retirement and later life

David Sinclair, Assistant Director, Policy and Communications . ILC-UK



Contents

History of retirement

– Retirement is a relatively modern construct

Where are we now

– Retirement has grown to 20 years

The future of retirement

– Citizenship in retirement – What are our rights and

responsibilities?



What is retirement for?



Retirement is relatively new

For most of human history, most

people have worked – either

formally or informally – up to or

close to the point of death, due

simply to economic compulsion.

(Generally) pensions provision

precedes the emergence of

‘retirement’ as a specific and

substantive period of life.



Year Early Developments

1670s First organised pension scheme for Royal Navy officers.

1880s Otto von Bismarck’s government provided the first state pension in Germany

1909 Old Age Pension introduced on ‘Pensions Day’, 1 January 1909. Means-tested benefit available at age 70.

1921 The budget made tax relief available for occupational pension schemes. Limits on tax relief introduced in 1947.

1925 Introduction of a contributory state pension for manual workers and other low-income workers. Eligibility at 65.

1946 National Insurance Act established a contributory state pension available to all.



Pension system beginning to crack

1978 The State Earnings-Related Pension Scheme (SERPS) was introduced to provide a ‘top up’ to the state pension.

1980 Abolishment of the ‘earnings link’ 1990s Scandals in management of occupational pensions let to

new regulations

2000s The closure of ‘defined benefit’ occupational pension schemes accelerated,

2002 SERPS replaced with State Second Pension2003 Introduction of Pension Credit



Retirement today

Between 1881

and 2008 the

economic

activity rates of

UK men aged

65+ fell from

74 per cent to

10 per cent.



Retirement today

The average retirement age for men is 64.5 years, and for women 62.4 years (ONS)

Vast majority of people can expect to live for at least twenty years in retirement

Today’s pensioners benefit from a level of support from the state not available to previous generations – with many in receipt also of generous ‘defined benefit’ pensions from their employers.

http://www.flickr.com/photos/luc/6800884507/sizes/z/in/photostream/



Where are we now – The happy side

Recent upwards trend in

effective retirement ages

Staying in work for longer

has a positive well-being

effect for many people

Improved health in later

life means we have more

opportunities to enjoy

leisure pursuits



But its not all positive

Faltering growth and the end of generous pension provision, may create a compulsion to work for longer

Employment opportunities for older people appear to be concentrated in low-quality positions

Hierarchical workplace structures may have flattened, but older workers complain of their particular skills and experiences not being utilised and training not being offered.

‘Age-blindness’, a result of our success in challenging discrimination, is a positive development, but not if it disables employers from offering age-appropriate support to their older employees



An era of reform

2005 The Turner Commission: Work longer, poorer pensioners or pay more. Proposals: Reduce ‘qualifying years’ for a full basic state pension to 30; the introduction of ‘personal accounts’; increase in the SPA to 68 by 2046

2010 The government accelerated the increase in state pension age. It will reach 66 by 2020. In 2011, the government announced plans to increase state pension to 67 by 2028, almost a decade sooner than Turner.

2011 The coalition government announced plans for a single-tier state pension, abolishing the State Second Pension and set at a level higher than Pension Credit guarantee payments. Eligibility is likely to be based on residency rather than contribution records.



Challenges ahead

The increasing fiscal burden of an ageing society & the possibility

of intergenerational conflict as today’s taxpayers are asked to

fund the retirement of today’s retirees. Uncertainty over the nature and scale of social care funding Persistent disparity in life expectancy. The problem of isolation in ‘very old age’ due to the breakdown

of traditional families and neighbourhoods. Mobility and mental health problems associated with ‘very old

age’. The disruptive nature of technological development. The individualisation of the pensions system.



Citizenship in retirement

Citizenship implies that, in return

for recognising our duties such as

obeying the law and paying taxes,

we have certain entitlements.



Citizenship and pensions

UK pensions system has moved away from the notion of citizenship, and towards individualised provision

BUT - Citizen’s Pension is an attempt to overcome the complexity in the relationship between citizenship and retirement, while establishing a solid, universal state pension as the basis for private saving

http://www.flickr.com/photos/nickatkins/5888232320/



What should we expect to contribute?

What kind of contributions

should people be making

in return for this support,

beyond paying taxes and,

presumably, National

Insurance contributions

during their working life?

http://www.flickr.com/photos/sammers05/3692360687/sizes/m/in/photostream/



Rights and responsibilities: Employment

Older citizens have a

responsibility to remain in the

labour market, where

possible, to enable skills

retention and minimise fiscal

burdens on taxpayers.

Older people should have a right

to support from employers,

and society more generally, to

enable longer working lives.

http://www.flickr.com/photos/kheelcenter/5279905182/sizes/m/in/photostream/



Rights and Responsibilities: Employment

46 % would consider delaying retirement if their employer offered support for reducing their hours, or working more flexibly.

41% of men and 39% of women would consider delaying their retirement if they could defer their state pension entitlement in return for higher payments later.

43% of men and 41% of women would consider retiring later if they could combine income from their existing employer and an occupational pension.

Only 2% of men and 3% of women said that nothing would make them consider delaying retirement.



Rights and responsibilities: Volunteering

The idea of an obligation to volunteer is contradictory. Many older people are eager to volunteer in later life as part of an active retirement. Opportunities to volunteer must therefore be appropriate: flexible, fun, and oriented towards utilising the skills older people have developed during their working life.



More time for volunteering?

73 per cent of EU residents do not undertake any formal voluntary work.

Half report they would volunteer if they had the time.

72.8 per cent of working-age people plan to volunteer more in retirement

Fewer than a third (+55) report that they would volunteer more if they had more time.



Rights and responsibilities: Housing and care Older people should have a right

to remain in their own home. It is vital for the well-being of many older care recipients

But it is fair that older people draw upon property wealth to help fund care costs

http://www.flickr.com/photos/thousandshipz/4679235/sizes/m/in/photostream/



Rights and responsibilities: Citizenship at end of life

We need a debate on rights and responsibilities

at end of life.

Do older citizens, in an ageing society, have a

right to have their lives prolonged for as long as

possible through intrusive medical

interventions – potentially at the expense of

treatments for people in ill-health earlier in the

life-course?

There is no easy solution but the emphasis, we

argue, should be on improving rather than

prolonging life.

http://www.flickr.com/photos/pentaxeric/3702092530/sizes/o/in/photostream/



Conclusions

Over 20 years we have gone from crisis

to crisis, slowly recognising that

longevity means we cant fund the

support in old age which we expect.

The crisis in care funding is emblematic

of the fact that the scale and design of

formal welfare and support services for

older people has not kept pace with

increasing longevity.

http://www.flickr.com/photos/dulcielee/6228005365/sizes/m/in/photostream/



There is a role for Government. We need national “retirement” strategies/policy incorporating all Government activities, not just DWP.

We must all difficult questions – “what is the point of retirement?”– What are the rights and responsibilities for old

age?– Can we debate rights and responsibilities

across the life-course? We must better recognise that retirement is a

process rather than an event.http://www.flickr.com/photos/jamelah/16144383/sizes/m/in/photostream/



And we must move quicker on gradual retirement ‘gradual retirement’ should

provide a potential solution to the challenges facing retirement.

The financial incentive structure must also be geared towards encouraging gradual retirement.

Employers must create and support opportunities for gradual retirement.



We need to abandon the notion that people make contributions in their working life in return for support in retirement, that is, that retirement marks the point where older people’s contributions are no longer necessary or valuable.

Continuing as a productive member of society in retirement is both a responsibility and a right.

We should expect older people to contribute to society in return for support in retirement – but equally, many older people are eager to contribute to society, and we need to ensure opportunities to make meaningful contributions are available.



Older Workers - 1948

Older Workers - trailer 1948

http://www.britishpathe.com/video/older-workers-trailer/query/people



Many thanks

David Sinclair

Head of Policy and Research

International Longevity Centre

[email protected]

02073400440

Twitter: @ilcuk and @sinclairda

mailto:[email protected]

Panel Response

Drummond Black FSB


Changing the perceptionof retirement

9 February 2012


ILC-UK and the Actuarial Profession debate: Changing the perception of retirement - Edinburgh

Education

Transcript of ILC-UK and the Actuarial Profession debate: Changing the perception of retirement - Edinburgh