If the generations fall out'''

1
If the generations fall out...

• Ageing population Facts behind the fiction

2
If...the generations fall out

• BBC programme, Wednesday 24 March
• BBC2 10 p.m.
• Innovative drama-documentary series called IF
  tackled the pensions and ageing population
  crisis.
• IF looked at the tough choices Britain must
  make to deflect the fall-out of an ageing
  population.

3
If...the generations fall out

• All the drama-documentaries in the IF series are
  based on rigorous journalism and research.
• This presentation covers some facts about the
  impact that an ageing population will have on the
  U.K. and abroad.

4
If...the generations fall out

• Are we heading for a future of protest and
  destruction? the BBC programme asks
• The baby boomer generation have lived well, but
  the next generation may not be so lucky.
• Will we have a rebellion on our hands by 2024 ?
• One person thinks so "Anyone that doesn't think
  there's a big generational war coming must be on
  Prozac"
• Laurence Kotlikoff, professor of economics at
  Boston University and author of 'The Coming
  Generational Storm'.

5
If...the generations fall out

• We are not going to keep quiet when a band of
  pampered pensioners steal the future from us.
• Chet Tremmel, Foundation for the Rights of Future
  Generations

6
The Baby Boom...
and the Senior Boom...

• From January 1946 to 1964, most industrialised
  countries lived the "baby-boom".
• An unprecedented demographical phenomenon that
  provoked a massive arrival of babies.

• But it has left a lot of widows, so
• The senior boom is in fact a woman's boom

7
The Senior Boom
is a Female Boom...

• Facts prove that the baby boom is in fact a
  woman's boom !
• At 60 years and over, there are 142 women for 100
  men,
• at 75 and over 191 women for 100 men and
• at 85 and over 281 women for 100 men.

8
Statistics

• There are currently 11 million people in the UK
  between 45 and 60, the so-called 'baby boomers'.
• They own 70 of the nation's wealth.
• In 20 years time, they could own 85-90 of
  disposable income in the UK.
• Source Martin Raymond, The Future Laboratory

9
Golden Years

• In 2024, the baby boomer generation, currently
  in their forties and fifties, will be starting to
  retire
• Number of people over 65 will have increased by
  nearly 50 since 2004. And this is just the
  beginning...
• The ageing population is not the only problem.
• A low birth rate will mean there are fewer
  numbers of younger people.
• This combination is one of the major challenges
  Britain will face in the future.

10
If...the generations fall out

• Choices about whether to increase
• immigration,
• the birth rate,
• the age of retirement or
• taxes, or
• whether to reduce
• pensions,
• means-testing healthcare and
• lowering the voting age to lessen the burden on
  the young.

11
Europes over 50s

• Europe had/will have
• 33 of over 50's in 2000 (against USA 27.5 )
• 41.5 in 2020 (against 35 in the USA),
• Representing
• 86.1 of 45-59 years,
• 67.46 of 60-74 years,
• 33.75 of 75-89 years old and
• 3.34 of 90's and over,
• or, more than 190 million people

12
Developed countries and pensions

• Government spending on pensions and health care
  in developed countries is on track to grow far
  more rapidly than official projections suggest
  and could trigger a global financial crisis
  unless steps are taken to control costs
• CSIS Global Aging Initiative report
• Steps are being taken to address this global
  challenge, such as

13
Developed countries and pensions

• replacing or supplementing pay-as-you-go pension
  systems with funded ones,
• extending working lives, and
• removing obstacles to productivity growth.
• Reform is needed most urgently in the countries
  of continental Europe and Japan,
• where retirement systems are the most expensive
  and
• the ageing trend is the most severe.
• CSIS Global Aging Initiative report

14
Developed countries and pensions

• "Gone are the days when we could effortlessly
  make benefit promises and leave it to future
  politicians to figure out how to pay for them.
• "For a growing number of countries, the future is
  here."
• GAI Research Director Richard Jackson

15
Consequences...

• The consequences of global aging will reach far
  beyond public budgets.
• Global aging "promises to restructure the
  economy, reorganize financial markets, reshape
  the family, redefine politics, and even rearrange
  the world order,"
• Shrinking workforces may soon make 'aging
  recessions' the normal state of affairs in much
  of the developed world.
• Growing public-sector pension deficits will crowd
  out productive investment.

16
Consequences...

• If the developed countries fail to confront the
  aging challenge, they risk a future of slowly
  growing wages and stagnant after-tax living
  standards."

• Greece, where retirement begins at age 55, could
  see public pension spending rise an additional
  19 percent of GDP by 2050, with total public
  pension and health spending reaching
  44 percent of GDP.

• In Spain, public pension spending could rise by
  16 percent of GDP, with total public pension and
  health spending reaching 37 percent of GDP by the
  mid-century.

17
The detail...

• France
• Combined health and pension outlays are on track
  to rise by 15 percent of GDP by the mid-century.
• Total government spending would absorb as much as
  two-thirds of GDP.

• Germany, Norway, and Austria
• combined pension and health outlays could exceed
  one-third of GDP.

• In Belgium, Canada, Denmark, Finland, Italy,
  Japan, the Netherlands, and Sweden,
• combined outlays could exceed one-quarter of GDP.

18
Unsustainable benefit promises...

• "Unsustainable benefit promises have become the
  principal source of retirement insecurity in most
  industrial countries"
• "It's a classic case of having too much of a good
  thing."
• Paul S. Hewitt, director of the CSIS Global Aging
  Initiative (with my emphasis).

19
Pensioners incomes as percentage of
non-pensioners incomes

• A separate cross-country comparison of pensioner
  incomes relative to the rest of the population
  was made based on eight country studies that used
  the family as the unit of analysis.
• This showed pensioners' relative income to be
  lower in Britain than in all the countries
  examined except Australia.
• Graph follows...

20
Pensioners incomes as percentage of
non-pensioners incomes
Source Office of National Statistics Pensions
and pensioners
21
Pensioners incomes as percentage of
non-pensioners incomes

• Relative incomes of pensioner couples were
  slightly lower in Britain compared with USA,
  Canada and the Netherlands
• but substantially lower compared with Germany,
  Italy and France.
• Among non-married pensioners, relative incomes
  were much lower in Britain than in Canada and all
  the EU countries shown.
• Non-married women had lower incomes than similar
  men in all eight countries.

EU members?
22
Statistics

• By 2040, number of people over 64 in Britain is
  expected to grow from 9.5 million to 15 million.
• Source Catalyst Report
• In 2000, 11.2 million people lt 15 years in UK.
• By 2040, will have decreased to 8.7 million.
• Source Centre for Strategic and International
  Studies
• 1999 working population was 47.8 of total UK
  population.
• By 2030 it will be 44.5.
• This could mean a shortfall of 2 million workers.
  
• Source Government Actuary's Department

23
Statistics

• About half of spending on hospital and community
  health services in Britain is for people over
  65.
  Source Catalyst Report
• Figures for the number of dependent older people
  in England are projected to grow from 2.5 million
  in 2001 to just over four million in 2031 - an
  increase of 57.
• Source Personal Social Services Research Unit
  (PSSRU) report on long term care/Government
  Actuary's Department

24
Statistics

• When pensions were introduced in the early 1900s,
  there were 22 people of working age in Britain
  for every retired person.
• In 2024 there will be less than three.
• Source Office of National Statistics
• Over 50s buy 80 of all top of the range cars,
  50 of skincare products, 80 of leisure
  cruises...
• Source Senioragency International

25
Statistics

• Over the last two decades, consumption by
  Europe's over 50s has risen three times as fast
  as that of the rest of the population.
• Source Senioragency International
• British State pensions as a percentage of wages
  are the lowest of all of the G7 countries
• Source Phil Mullan, The Imaginary Timebomb
• People aged 60 and over already outnumber
  children under 16 in the UK for the first time
  Source 2001 Census

26
Norway...

• In Norway, the 50 own more than 75 of the
  total national assets !
• In 2015, more than half of the Norwegian
  population will be over 50 years old.
• Source Senioragency International

27
Over 50s

• Across the developed world, they are
• active
• happy to spend their time and money to have fun
  and
• to re-equip themselves in automobile, houses,
  clothes, make-up, in wine, restaurants, travels,
  cruise-line trips and to invest in the stock
  exchange, life-insurance
• Don't forget "It's is where the money is!"

28
More facts...

• In each of European country from 1996, one person
  has reached age 50 every 50 seconds in USA, the
  rate is one every 7 seconds !
• Rapid ageing of population of economically
  developed countries been apparent for long time.
• The rhythm of this ageing is speeding up.
• Between 1990 and 2020, under 50s in Europe, set
  to increase by only 1,
• over 50s will explode, with growth of more than
  75.

29
Reasons for growth...

• three reasons for the growth in number of
  over-50s
• post-war baby boom,
• decrease in the birth rate
• growth in life expectancy.
• majority of ageing countries are industrialised
  countries of Europe, Asia and North America.
• Oldest country in world is Italy 22.2 of
  population is over 60, closely followed by
  Sweden, Greece, Belgium, Germany, Spain and the
  UK.

30
Never happened before?

• The improvement in human life expectancy is quite
  incredible.
• And
• two-thirds of those who have reached the age of
  65 since the beginning of mankind are living
  today !

31
Purchasing power...

• In each of the European countries, the purchasing
  power of the over 60s has increased seven times
  over 20 years, more than salaries (sixfold) and
  prices (fivefold).
• although the old were once thought to be poor,
  now they are not.
• Although the poor (old and young) may still
  be...

32
Disposable income...
Household disposable income by age group, on
average, in developed countries (all together
100)
33
Life cycle Money

• The life cycle of the over 50s based on the three
  determining criterias money, health, time
• MONEY 50-59 YEARS High
  disposal income. 60-74 YEARS
  Maximum disposal income, the golden age of
  consumption. 75-84 YEARS
  Weaker means and appetite for buying (economic
  and psychological).
  85 YEARS Many in precarious state,
  especially widows.

34
HEALTH...

• HEALTH 50-59 YEARS Vast majority in
  good health. Sight decline. Menopause. 60-
  74 YEARS Still in good health but sight
  continues to decline. Deafness. 75-84
  YEARS Physical problems are accentuated.
  Movements less precise. 85 YEARS
  High level of dependency.

35
TIME

• TIME 50-59 YEARS Free time, but
  moderate in quality. 60-74 YEARS More
  free time. 75-84 YEARS More free
  time. 85 YEARS More free time but
  can no longer go out.

36
The UK car market - who buys ?
37
Average equipment level ...
38
Any Questions?

• Taken directly or amended from materials from the
  following websites
• BBC News UK Edition Ageing population Facts
  behind the fiction
• http//news.bbc.co.uk/1/hi/programmes/if/3493352.
  stm
• GLOBAL RETIREMENT CRISIS. CSIS Report Pension,
  Health Care Spending Threaten World Stability
• http//www.csis.org/press/pr02_24.htm
• Office of National Statistics Pensions and
  pensioners
• http//www.statistics.gov.uk/CCI/Nscl.asp?ID7822
  Pos1ColRank1Rank64
• Senioragency International
• http//www.senioragency.com/
• http//www.senioragency.com/press_articles/press_
  release1.php
• http//www.senioragency.com/press_articles/press_
  release2.php
• http//www.senioragency.com/press_articles/press_
  release3.php