John’s Blog No.85 – Census 2011

The Census 2011 results for England and Wales are finally out and for persons, male and female, show increases from the last Census in 2001 of 11% in retired population over 65 from 8.312 to 9.223 million, just under a quarter of the total population rise of 7.1% some 3.7 million. If these were rates projected over the next 20 and 40 years, they would give a rise of 23% to 2031 and 52% by 2051, resulting in an over 65 population of 11.34 and 14 million respectively, which is much lower than the current projections for over 65 population doubling or worse in this time. Furthermore this was a period which saw a rapid rise in immigration and the large influx from Commonwealth Independence and post WW2 baby boom, which are just starting to enter retirement, resulting in a peak in elderly population over the next few years. The over 85 population has risen at a higher rate of 24%, some 242,000 to 1.255 million, due to the accumulation effect resulting from reduced mortality at the early ages, but is only 13% of the total over 65 population and declining rapidly. However if one compares the working age population age 16 to 64, this has increased by 9.2%, indicating an overall growth of those entering retirement, rather than longevity in retirement given by forward projections. If one also looks at the progression of the 55 to 65 into retirement at 65 to 75 from 2001 to 2011one finds an 88% survival compared with 73% within 2011, also indicating increased transfer rates. Again looking at the decline of the over 65 population with age, one finds that at age 70 this has dropped to 71% and down to 47.4% by age 75, which has dramatic impact on the effect of retirement age, which if delayed until age 70 means there is a one in three chance of never drawing a pension at all. Life expectancy is the point at which the population has halved; the Census figures suggest this could be just under ten years and not the twenty years given by Life Tables, which are based on mortality rates. These show trends and because they involve less than one per cent of the population, need time to take effect. Census population figures are more a snapshot of what is happening at that year in time, a head count of numbers, in the normal flow of life from birth to death. Although medical and social advances have reduced the losses, there is no reason to believe they have stopped altogether. The present figures do not therefore justify the panic reaction to the problems of increased longevity and the drastic measures of delayed retirement, increased contributions and reduced benefits to meet a crisis which appears to be exaggerated and being dealt with in the wrong manner. In any event even the worst projections were manageable, but only by a change in attitude and scheme basis, particularly as regards the largest provider of the State. Individuals need to be more independent and self sufficient in providing for their retirement. It is no longer possible for those in work to support the increasing numbers entering retirement, the basis of the present State Unfunded pension system; each person in work needs to take their own pension pot with them, whose size must be large enough to support them when they relax after a life of work. This size may need to change to meet any increased lifespan and special needs associated with elderly care, which may need increased contributions, but private pension provision is very inefficient with high costs and low annuity returns and State provision is outdated and unsustainable. The population over 65 is increasing but the reasons and manner need greater study and understanding; we are living longer but is it catastrophic or just acceptable enough to be allowed for and enjoyed. In a well managed society pensioners are an inherent part of the economy and a benefit not a burden.