Dr Les Mayhew explains the challenges an ageing population brings, and how migration could help slow increases to the state pension age
What have been the main trends in longevity in recent decades?
Lifespans for both men and women have increased rapidly. For women it’s been going up steadily since 1900, but men lagged behind and it wasn’t until the 1960s that it picked up. Then it did so very strongly after 1980 and has been on a convergent path with women for the last 25 years. Men are catching up because fewer of them are smoking or working in hazardous industries. Since 1950 there’s been an increase of about 10 years for women and slightly more for men.
Other trends include annual fluctuations in life expectancy calming down, due largely to better public health. Then there’s the growth in the number of the very oldest old. We’re going to get lots of centenarians, but not nearly as many as people think. The changes will be more people who in the past lived to their 70s living into their 80s, and more people who lived into their 80’s now living into their 90s.
There’s no convincing proof that improvements are levelling off. There are theories that suggest the increase in mortality in recent years is the impact of spending cuts on social care and health care, but there’s no proof they are directly to blame.
What are the effects of this on the wider population?
It will continue to age. The population aged 65+ is going to double by 2040, but the working age population is levelling off. The overall population of the country is going up to about 75 million by 2040 which is a massive increase compared to the previous 25 years when it was creeping up slowly.
A lot of that is due to migration. One of my macro-economic scenarios is looking at what would happen to pension age if migration stops. It would go up, but the question is by how much. You only need small changes in productivity and activity rates (that means people working longer) to counteract that, but the evidence is that there will not be enough healthy people to take that forwards.
What did you make of John Cridland’s state pension age review?
I liked it. He dealt with the question of not making any special arrangement to deal with geographical inequalities because inequalities are everywhere, even in more affluent areas. He distanced himself from making the system even more complicated. It’s important to keep state pension age simple, because other providers of pensions can work around that.
He plumped for the one-third rule [people should spend one-third of the life in retirement] and there are different ways of calculating that rule. They’ve used life expectancy at state pension age, but if you look at life expectancy when working life begins, or even at birth, you get a less generous answer.
When I put that together with things like the dependency ratio, and changes in the UK population, I think increases to age 68, or even above, should occur in the early 2030’s and not the late 2030s. Even if the government does agree that it should be the late 2030s, there’s Brexit to come and possible massive changes in migration – we just don’t know. This could put a lot of pressure on that policy. But there will be scope to change it again in the 2020s and that’s probably what will happen. Today’s retirees need to understand that the next generation will have a very different experience to the one they had.
Does the public use of statistics frustrate you?
What’s said about migration – the value or otherwise of immigrants and how these things get translated into hysterical headlines – is very irksome. I was particularly annoyed by the Brexit process where statistics were bandied around and no one really said “what are the facts?”.
But on the whole, government analysts, statisticians and economists do a great job and do it in a very unbiased way, so as long as that continues I’m quite confident in the future of the statistics we have.