Measures potentially including raising the age of pension eligibility in line with life expectancy may be needed to tackle the rising cost of the UK’s ageing society, the International Longevity Centre’s UK branch (ILC-UK) said.
Age-related spending in the UK is projected to rise from 21.3 per cent of GDP annually in 2016-17 to 26.3 per cent of GDP during 2061-62, the think tank said, as public pensions, health care and long-term care take up more and more of the budget. In particular, public sector pensions are forecast to rise to 10.8 per cent of GDP by 2061-62 – costing £33bn more in today’s money.
To pay for this, the government should extend access to the labour market to older people who are able to work, and consider keeping the pension age automatically in line with life expectancy.
“Governments across the world must not ignore the future costs of our ageing society,” said ILC-UK assistant director David Sinclair. “Drifting along is not an option and does not benefit future older or younger people.”