Never a day goes by without some reference to this, it is used as an excuse to impose hardship and misery and of course save money. It appears to be accepted blindly by all, particularly those who have major control over our lives; Major Institutions; Ministers, MPs and even the CBI and Trade Unions.
Yet there appears to be little study or investigation on the validity of the forward projections of increased Life Expectancy, just the conclusion we will live longer and therefore work longer, pay more and receive less.
The term life expectancy is vague, it is generally taken as the time we have to live from a certain age, usually 65, but this is not true, it is the time half of us may live and is derived from Statistical projections based on Mortality rates, which represent less than 1% of the population.
Over the next 28 years by 2036, the over 65 population is projected to increase from the current 10 million to 17.4 million, some 74%; however over the past 28 years it has only increased by some 18%, from 8.4 million to 9.9 million. This lower rate would only give a projected population of 11.8milion in 2036; the latest estimated 2008 to 2009 figures only show a 1.27% increase per year.
It is only sensible to ask what has changed so dramatically by over a factor four, there has been no anti-ageing drug developed and current major medical advance will take 10 to 20 years in proving trials.
There is no question that people are living longer and the over 65 population increasing, but the main effect arises from increasing numbers reaching 65 and the main question is at what rate over what timescale. We are currently in a peak transfer rate due to the historical effect of increased birth rate after WW2 combined with high immigration figures from Commonwealth Countries at independence. We also have a baby boom.
This illustrates the time scale we are dealing with, not 25 years but 65 or over and this is shown by actual population figures, which give much lower rates than projections for both increases and life expectancy. The population decline for males show life expectancy at 9 years as opposed to the projected 18 year figure.
This is because projections are based on life tables derived from birth, mortality rates and migration. Birth rates are currently 1.2%, which means that the UK population is replaced once every 80 years unless massive migration influx or disaster occurs. This sets the timescale for change.
The lower rates allow more time to adjust and the 2011 Census figures should give a better indication of change rates and I am surprised that they are not yet available, perhaps they undermine current estimates.
There is good reason to question the validity of forward population projections for the elderly, if they do not occur they give more time to act, but they are generally accepted. We need to act now on the basis that they will occur and will lose nothing if they are lower.
This worst case population scenario has been studied by the author and shown to be manageable, if tackled correctly, but not by short term panic measures.
Effectively they are a wake up call to act, State and Public Sector pensions cannot survive this population onslaught in the present unfunded form, particularly as they are currently badly managed, if at all.
Contributions need to be stored, husbanded and made to work and grow to produce individual funds at the lowest cost and provide self sufficiency in retirement, at present levels they could also fund welfare pensions at a good level, provide increased care and care homes for the elderly plus other needs in retirement.
We need to treat pension provision in an efficient, sensible and Commercial manner, we work hard and save all our lives for the peace and tranquillity of retirement and deserve value for money and security. The State has failed if it does not do this and that failure is apparent, it needs to correct this mistake, it has adequate funds from contributions, it needs to return them to members in an independent efficient funded scheme.
There needs to be an urgent serious study of the over 65 population, why it should suddenly increase so rapidly, whilst the rest does not and the validity of the assumptions being made, which do not appear to be supported by the actual or estimated population count.
Major panic decisions are being made on what is no more than supposition, which affect all our lives and future, we need to know why?
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