A powerful committee of Lords has issued a stark warning that the United Kingdom is 'strikingly unprepared' for the profound pressures of an ageing society, with young people set to bear the brunt of the consequences.
The House of Lords Economic Affairs Committee, in a damning new report, accuses successive governments of failing to adequately plan for the economic and social challenges arising from people living longer lives. The peers argue that current strategies are insufficient and paint a worrying picture for future generations.
The Demographic Shift: A Rapidly Ageing Nation
The warnings are grounded in stark demographic data. In 2023, those aged 65 and over made up 18.9 per cent of the UK population, a significant rise from 16.5 per cent in 2011 and just 13 per cent back in 1972.
This trend is projected to accelerate dramatically. Recent research from the Office for Budget Responsibility (OBR) forecasts that over a quarter of the population (27 per cent) could be aged over 65 by 2074.
Compounding this shift is a sustained fall in the birth rate. The report highlights that the fertility rate in England and Wales dropped to a record low of 1.44 children per woman in 2023, far below the 2.08 rate needed for the long-term natural replacement of the population.
Economic Consequences and Policy Failures
The committee states that simply continuing to raise the state pension age—which is soon increasing to 67—is an inadequate response. This is because a growing number of people are already leaving the workforce before reaching pension age, a move that risks increasing pensioner poverty rather than solving the underlying fiscal problem.
The OBR has forecast that, on current policy settings, the economic strain from an older population could push public sector borrowing above 20 per cent of GDP and debt to around 270 per cent of GDP by 2070. This is driven by the soaring costs of the state pension, social care, and healthcare.
Lord Wood of Anfield, the Labour peer who chairs the committee, was scathing in his assessment. He stated that successive governments have not focused on the 'seismic effects' of demographic change and called the focus on the pension age a 'red herring'.
'Getting more people in their fifties and sixties to stay in or return to work is key,' Lord Wood said. He emphasised that young people today will need to plan from a much earlier age to work longer and save more for retirement.
Immediate Challenges for Public Services
The falling birth rate presents immediate logistical and policy dilemmas. Former Institute for Fiscal Studies director Paul Johnson pointed to the conundrum of spare school places as pupil numbers decline.
'What to do with all those spare school places?' he asked in The Times, noting the complex policy landscape around closing schools. He posed a fundamental question: will the nation use this demographic shift to reduce education spending or to increase spending per pupil to improve quality?
The committee's report concludes that the government's lack of a coherent, long-term strategy on ageing shows the issue is 'not being taken seriously enough'.
In response, a government spokesperson said action was being taken, citing reforms to improve healthy life expectancy, the development of a National Care Service backed by over £4 billion in additional funding by 2028-29, and 'Get Britain Working' reforms to boost employment through Jobcentre support.
