20th February 2013, Royal College of Physicians of Edinburgh, 9 Queen Street, Edinburgh, EH2 1JQ. 16:00 (for a 16:25 start) – 19:00
On the 20th February, ILC-UK hosted a joint debate with the Actuarial Profession which considered the new ILC-UK report “The cost of our ageing society”.
The report, which was sponsored by Milliman, highlights the projected financial impact of the cost of the world’s ageing population. It argues that governments must do more to reduce the long term cost of ageing to the public purse.
In the report, ILC-UK calls on governments across the world to consider linking eligibility ages of state pension to life expectancy and do more to ensure that the labour market is accessible to older people.
“The cost of our ageing society” reveals that:
- In the UK: the old-age dependency ratio is expected to rise from 28% to 47% (from around four working-age people for every person aged 65 and over to around two working-age people for every person aged 65 and over) between 2010 and 2060.
- In the EU: the old-age dependency ratio is expected to rise from 28% to 58% (from around four working-age people for every person aged 65 and over to under two working-age people for every person aged 65 and over) between 2010 and 2060.
- Globally: between 2011 and 2060 the old-age dependency ratio is expected to rise from 16% to 42% (from more than six working-age people for every person aged 65 and over to just over two working-age people for every person aged 65 and over).
Until recently, the financial impact of demographic change had received only limited macro-economic analysis and a recent report by the IMF argued that “few governments or pension providers adequately recognise longevity risk”.
But over the past three years, we have seen growth in national and international data on the financial cost of future demographic change. The 2009 European Commission sustainability index found that the public finances of the UK, Spain and 10 other European Union countries were at long-term high risk and that “the cost of an ageing population is expected to “dwarf” the impact of the current financial crisis many times over”.
In the Chancellor of the Exchequer’s 2010 Emergency Budget, George Osborne highlighted the scale of the UK challenge ahead, noting that “by 2015-16 we will be spending over £10 billion a year simply to meet the gap between pension contributions and payments to the unfunded pensions they support”.
The Office for Budget Responsibility (OBR) Fiscal Sustainability Report has highlighted the potential impact of current demographic pressures in the UK, stating that “public finances are likely to come under pressure over the longer term, primarily as a result of an ageing population”.
The event considered the findings of “The cost of our ageing society”. It also allowed debate on:
- Are we adequately considering the long term economic costs of longevity?
- Or are we overestimating the impact?
- Are some countries responding better than others to the economic cost of ageing?
- How can governments across the world best respond to the fiscal challenges of demographic change?
- How can policymakers best react to the cost of ageing?
Agenda from the event
16:00 – 16:25
Registration with Tea/Coffee
16:25 – 16:30
Welcome by chair
16:30 – 17:15
Presentations on the Cost of Ageing.
Speakers to include: Philip Simpson (Milliman), David Sinclair (ILC-UK), Emma McWilliam (Milliman)
17:15 – 18:00
18:00 – 18:10
“Fiscal sustainability: Demographic change and ageing population – the Scottish Perspective”. Kenneth Gibson MSP. Convenor, Scottish Parliament Finance Committee.
18:10 – 18:25
Questions and discussion
Close by Chair and Reception
To view the presentation slides from the event, see below: