Ageing of the UK population (and most of the Western World) is seen as a critical issue by many commentators for the future of consumer markets and government spending. Recently, the Financial Times devoted a six-part series to the issue under the title The Silver Economy. If the FT is doing that it must be important.
And, indeed, it is important – but not in the ways many people believe. Although it is often pointed out that people living longer is a good thing, there is always something of a whiff of it being a ‘problem’ in some way. A classic example is the concern about dependency ratios – the proportion of the population that is under the age 15 or 65 and over. In this way, as the population ages so the dependency ratio increases as do those who are perceived to make no economic contribution to society.
Even the normally level headed FT sends contradictory messages talking about a ‘shortage of workers and consumers’ while at the same time highlighting a ‘new and powerful consumer class’.
But all this is predicated on a static use of the definition of ‘silver’ – the number of people aged 65 or over. Yet, as longevity increases, surely our definition of what is older is should change. Of course, this wouldn’t be true if people had longer periods of ill-health at the end of their lives. But, there is no evidence that this is true as the authoritative Kings Fund has pointed out:
‘The trend for healthy life expectancy at 65 in England for males and females has increased approximately in line with overall life expectancy at 65 …. [suggesting] that that the extra years of life will not necessarily be years of ill health ’.
Our own analysis of population forecasts suggests that in 30 years’ time the proportion of those in ill health at the end of their lives will have hardly increased at all from the present. And, there are reasons to believe that perhaps healthy life expectancy could grow faster than longevity itself as increased use of preventative medicine and technology (transhumanism) improves older age health.
So, if the ageing of the population is a problem it’s a nice problem to have.
What does this mean for business? Here, we can agree with many commentators. Our perception of what constitutes old age has to change. Marketers and advertisers have to stop focusing on 20 somethings. (Something we’ve always assumed was the result of many in that profession being in their twenties or thirties!) And, forget about 40, 50, 60 or even 70 (as scientists at the Max Planck Institute for Demographic Research have suggested) now’s the time to start thinking of 80 as the new 30.
Oh, and this does all presume that state retirement ages increase with longevity. So, you’re going to have to give up those plans to retire at 65.