The aging population

lemonjelly

I know this is an issue which a few mse-ers feel is an important economic issue.

The fact remains that as we age, the costs of supporting the elderly continue increasing, and that cost burden is placed upon those of working age (in the main). We all know that people are living longer. I assume we all accept too that more people are living longer, stretching that burden wider.

In addition to this, the significant volume of expenditure per person increases exponentially during the last 12 months of their lives. This has a huge knock-on impact on NHS budgets, including palliative care, home services etc.

Today we have news reports that councils will likely have to increases charges for home care services. I was interested in how many people this would affect.

Combine this with the fact that we have a great deal of vitriol generally aimed at young people nowadays, with 1 in 5 under 25's being out of work, and them generally being seen as workshy chavvy so & so's, I was amazed to learn that, for example, in Birmingham, more than two thirds of the over 50's in the area are economically inactive.:eek: (Defined in the study as: Economically active means anyone who does anything which puts money into the economy and this mainly refers to working, but it could be selling shares, or spending savings).

I read more details on this over the weekend, & this report is more detailed than the breif highlights I'm linking to below. It anticipates that areas in Staffordshire will have over 50% of their population aged over 50 by 2029, and areas of Warwickshire there are less over 50's who are economically inactive than Birmingham (less than 30%:eek:).

http://www.bbc.co.uk/news/uk-england-birmingham-11695154
http://www.bbc.co.uk/news/uk-england-stoke-staffordshire-11688268
http://www.bbc.co.uk/news/uk-england-coventry-warwickshire-11687146

Not looking good for our futures is it?

What does this say about how we're going to take our economy forward?

Value all thoughts...

Davesnave

Perhaps many of those over 50, who are economically active, move to popular areas for retirement and semi-retirement?

In the village where I live, most of the stuff that goes on is organised by older members of the community, probably 2/3 of whom came from elsewhere.

Loughton_Monkey

This state of affairs, although sad, is not unexpected and not surprising. It has been talked about and discussed for as long as I remember. It derives from a combination of features:

1. The age distribution shift. An almost exact science. Governments and Public have known for years and years that fewer and fewer working people will be left to 'support' more and more elderly.

2. To make point 1 'worse', it is equally a no-brainer that technological advances tend to make the 'cost' of healthcare far more expensive (for all, but including the elderly).

3. There is a "British Disease" when it comes to saving. We've all seen those headlines for years [..."Fewer than 50% of UK population have more than £500 in the bank...."]. This would be to some extent mitigated if there was a culture of younger members of the family automatically helping their older relatives both financially and physically.

The first two points are the 'responsibility' of Governments to address. Personally I think governments of all flavours have failed us by (a) allowing the NHS to become bureaucracy-ridden - thus wasting huge amounts of money, (b) insisting on maintaining ancient 'ideals' about it being 'free at point of delivery', and (c) as a consequence riddle the NHS with an additional burden - very expensive actually - of 'managing the waiting list'.

The theoretic ideal of "free at point of delivery' has been breached already by prescription charges and now by 'screwing the elderly' to pay huge sums for care. Simple measures like all taxpayers having to pay £25 every time they go to GP, or £10 contribution for an X-Ray etc. would be a preferable alternative (as in many excellent healthcaring countries). The vast, vast, majority of GP visits are by 'normal' people for 'normal' ailments and so [before anyone jumps on this] I am not advocating screwing cancer patients for long sessions of treatment.

Most countries don't operate a "waiting list". The cost of, say, kidney stone treatment is X. Let's call it £1,000 just for example. Now it's going to cost the £1,000 whether I have it done today, tomorrow, or in 9 months time (inflation disregarded). But the difference in cost to 'manage' me through waiting lists, letters, appointments, painkillers in the meantime, must surely add another £1,000. This is offensive waste.

[Throughout my career, in financial operations, I was a strong advocate of measuring 'cost per transaction'. I know as absolute fact, and demonstrated several times, that 'cost per transaction' with a backlog tends to be between 2 and 3 times the cost without a backlog.]

The 'savings' issue is more down to the population. Individual responsibility. I tend not to 'buy' the argument about 'only the rich can save..'. Rightly or wrongly, we all go to school, we all get educated, we all devlop 'skills' - perhaps cerebral, perhaps manual, and we all then follow a 'career path'. This could be as a humble cleaner. It could be a minor clerical career. Or a skilled engineer, manager, director, entrepreneur.... The whole spectrum. We are not a communist country so we don't all work for the state at the same salary.

But I believe the same principle is equally true for the Brain Surgeon as it is for the Office Cleaner. You have an income stream. You must live within it. If you save some of it, then your lifestyle (whether it be rags or riches) can be maintained after your income dries up. If you spend it all to enhance your lifestyle, that's up to you. But do not expect sympathy when your income stream dries up.

I don't know why, but this message generally fails to get through in the UK. Asians know it instinctively. Lower wage employees tend to need to save less, since state pension is a much higher proportion of their retirement income. There is a general 'fairness' with the Brain Surgeon being taxed, say, 45% overall, and the unskilled manual worker paying 10%/15% overall in tax. It is the same 'fairness' perrhaps that the Brain Surgeon needs to save 25% to continue the same lifestyle in retirement, while the other will need to save, say 10%.

ultrawomble

But if people saved more wouldn't the economy shrink?

quantic

I would happily fund "The Aging Population" provided that they are BANNED from driving between 7am and 10am.

PasturesNew

I live where people retire to ... this means a rural area is shouldering the cost of more elderly people, compared to the cities those people were economically active in.

As for being over 50 and not economically active ... if you're about that age and find yourself out of work it's hard to be taken seriously by employers, who prefer to hire younger people usually.

I'm economically active, but I can't get a job. Look great on the CV ... turn up and they realise it'd be like working with their mum, so not chosen

Radiantsoul

Loughton_Monkey wrote: »

Most countries don't operate a "waiting list". The cost of, say, kidney stone treatment is X. Let's call it £1,000 just for example. Now it's going to cost the £1,000 whether I have it done today, tomorrow, or in 9 months time (inflation disregarded). But the difference in cost to 'manage' me through waiting lists, letters, appointments, painkillers in the meantime, must surely add another £1,000. This is offensive waste.

[Throughout my career, in financial operations, I was a strong advocate of measuring 'cost per transaction'. I know as absolute fact, and demonstrated several times, that 'cost per transaction' with a backlog tends to be between 2 and 3 times the cost without a backlog.]

The cost of waiting may be large, but I think you are incorrect that it is costless not to have a waiting list. The waiting list will exist because their are insufficient "doctor hours" available. Charging for doctors would reduce demand. Having more doctors would increase supply. But both have significant costs - consultants sat around doing nothing or people unable to afford medical treatment.
Queuing imposes a cost, but it is borne largely by those who have to wait and to an extend a person place in the queue depends on clinical need.

drc

It makes you wonder why the government is so insistent on importing even more people into this country when we already have such high rates of unemployment (amongst the young let alone the old/retired).

The problem with the world in general is that there are too many people, too many unwanted children and not enough resources to go around. I dread to think what the outcome of all this will be .

lemonjelly

drc wrote: »

It makes you wonder why the government is so insistent on importing even more people into this country when we already have such high rates of unemployment (amongst the young let alone the old/retired).

The problem with the world in general is that there are too many people, too many unwanted children and not enough resources to go around. I dread to think what the outcome of all this will be .

Interesting that you have posted this, which I feel highlights our mindset/preconceptions. You highlight the unemployment rate amongst the young, with the older section of the population an afterthought.

1 in 5 under 25's are unemployed. 20%.
Between 1 in 2 & 2 in 3 over 50's are economically inactive - 50-66%.

Radiantsoul

Immigrants are going to one source of carers for older people.

michaels

So many issues:

Savings - if you are on a low and potentially unstable income then it makes sense not to - you forgo consumption now to save and then become ineligible for benefits if you have any capital. Those on low incomes who don't save are begin rational.

The burden of the elderly in retirement areas - I thought the elderly price locals out of 'retirement areas' - to afford this means they have considerable funds which they will spend on the local area (on gardeners, home help etc) and then when they require care will have an asset (property) which should support their care.

Macro-economics of saving to support retirement - savings are a way of defering consumption from when the money is earned to a later period. However at any point in time the available workers can produce only a certain amount so when the population is older the output of the remaining workers will have to be shared between those working and those trying to live of their 'savings' - the share of output that goes to those retired will depend on a number of factors of which savings will only be one. IN aggregate if all save mor enow and then all try and spend savings later it will just mean everything increases in price until the amount of money chaising the output pays for the amount that is produced.

Which brings us to immigration - Keeping the age profile constant will prevent the relative number of dependants increasing compared to the number economically active. Increasing longevity (without a commensurate increase in the retirement age) by definition will increase the number of dependents to workers, immigration (which tends to be of younger workers) will help increase the relative number of workers.