Live long and prosper?

Demographic trends and their impact on living standards

Intergencommission.org 2

People are living longer

Source: ONS, 2014-based UK and England & Wales lifetables

Average expected years of life at birth for females by generation

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Each generation is living longer than the next (on average)

Survival rates for different generations, Males, 1896 to 2015

Source: ONS, 2014-based UK and England & Wales lifetables

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Living longer is something to be celebrated but raises a challenge too

• Individuals need higher incomes to sustain longer lives

Intergencommission.org 5

Living longer is something to be celebrated but raises a challenge too

• Individuals need higher incomes to sustain longer lives

• Collectively there are concerns that an ageing population will raise the tax burden (or lower available support) for younger generations

Intergencommission.org 6

Living longer is something to be celebrated but raises a challenge too

• Individuals need higher incomes to sustain longer lives

• Collectively there are concerns that an ageing population will raise the tax burden (or lower available support) for younger generations

• But we are not our grandparents. How we live is dynamic, not a static thing

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Changing lives: 1) investing more in their education

Source: ONS, 2014-based UK lifetables and England & Wales lifetables

Proportion of children in full-time education, 1953 to 2010

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Changing lives: 2) having children at later ages (and fewer)

Proportion of women by age of mother having first child

Source: ONS, Live births in England and Wales, 2013

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Changing lives: 3) working longer

Female employment rates by age for different generations

Source: Resolution Foundation analysis using Labour Force Survey microdata

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Changing state: Not just dealing with longevity, but also cohort size. That complicates things. There are a lot of baby boomersNumber of births by years (millions)

Source: ONS, UK & England Wales live births, 2015

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The Baby boomer generation boosted the young population in 1950s and 1960s…

UK population by generation, 1965

Source: ONS, mid-year population estimates, UK

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Boosted the working age population in the following decades…

UK population by generation, 1985

Source: ONS, mid-year population estimates, UK

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Boosted the working age population in the following decades…

UK population by generation, 2010

Source: ONS, mid-year population estimates, UK

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…and are are now set to speed the increase in the ageing of the population

UK population by generation, 2036

Source: ONS, 2014-based population projections, UK

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Traditional support ratio suggests a striking problem about to hit, but this is too simplistic an argument

Support ratio (ages 20-64/(under 20 + 65 plus))

Source: ONS, 2014-based population projections, mid-year population estimates, UK

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An ‘effective’ support ratio (working v non-working population) is less dramatic – though still simplistic

Effective support ratio (employees/non-working)

Source: ONS, 2014-based population projections, mid-year population estimates, UK, Labour Market Statistics, BoE historic data

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Longer lives bring opportunity and challenge• Demographics are changing people’s approach

to life, work and family formation

• Younger generations are set to benefit from continued gains in longevity

• But they also face different challenges to older generations, particularly from work, housing, wealth and retirement planning

• These are all issues the Intergenerational Commission will focus on in the coming months

Source: ONS, 2014-based UK lifetables and England & Wales lifetables

Live long and prosper?

Demographic trends and their impact on living standards