|
|
|
|
||
|
||
|
|
||
| SEARCH | SUBSCRIBE | ||
|
 |
By Nicholas Timmins, the Financial Times
Life expectancy is on the increase. It has
been for decades, but for decades actuaries - who tend to count
conservatively and were reluctant to believe that the gains made in the
1980s and 1990s were going to continue - have been running to catch up. Just how fast they have to go has been shown
by the recent upward adjustment made by the government actuary whose
latest projections have added between 10 and 13 per cent to life
expectancy for those in their 60s and 80s compared with the figures being
used just two years ago. Slowly but surely the implications of this
are becoming discernible for pensions, working lives and healthcare costs.
But there is one area where huge uncertainties remain - the costs of
social care. Longer lives have big implications for
pensions and work. Combine longer life with longer education - more people
taking degrees, indeed more people taking second degrees before they start
serious earning - and the equation that pitched normal retirement at about
65 is one that can no longer hold. The days when people worked for 40 or even
50 years to fund a retirement that might last 10 years are being replaced
by an equation where at most they will work 40 years to fund a retirement
that may last 20 or even 30 years if they go at 65 - and that ignores the
marked trend in the UK in recent decades for early retirement, both
voluntary and involuntary. As Adair Turner, chairman of the
government's Pension Commission has been arguing, if pensioners are not to
be poorer in old age, or if future workers are not to give up much more
consumption to fund other people's old age, the average working life is
going to be longer. There is an inevitability about it. How much longer remains open to question, as
does what sort of work. Will it be full-time, part-time or another form,
such as flexi-working? There is room for a lot of debate about how
companies and employees are going to adjust to a world that asks big
questions about when careers peak, and how older workers can remain
engaged and productive. In a world where people's last job may not be
their most senior, final-salary pensions may have to become career-average
ones so that people can more easily downsize their jobs as they near
retirement without downsizing their pensions. The implications for healthcare costs are
also becoming clearer - and they are far from disheartening. From around
the world - specifically the Driven partly by healthier lifestyles, which
makes it possible for people to work longer, and partly by fewer crippling
manual jobs, disability rates in old age have been falling. Far more is spent on healthcare for the
elderly than for other groups: those aged over 85 consume 10 times more
NHS resources per head than those aged five to 44. But much of this
appears to be the cost of dying - the greatest expenditure comes in the
last months of life as treatment is given to what prove to be untreatable
conditions, and the heaviest expenditure comes regardless of whether
people die in their 60s or their 90s. Indeed there is some evidence from the In other words, an ageing population, with
many more people living into their 80s and 90s, will add to healthcare
costs but not prohibitively. There is no reason to fear the
"demographic time-bomb" on those grounds. There is an important qualifier here. The
studies that point to these conclusions have all looked at acute
healthcare costs - the cost of medical interventions. What is much less clear is the impact on
social care provision: the cost of providing lower-level help with
shopping, feeding, bathing and other normal activities of daily life where
people may suffer disabilities that are not expensive in healthcare terms
but need support - from help at home to sheltered accommodation. If this
kind of support is absent, acute healthcare costs may result. But here there are fewer good data on which
to base a judgment. It was an issue that Derek Wanless looked at in his
report on health spending, commissioned by the government, that provided
the justification for the government's huge investment in the NHS. No review of healthcare resources could be
complete, he said, without considering the link between health and social
care - but the data were lacking to make sensible projections. He called for an immediate study of the
likely trends. That was two years ago, and nothing has happened since. It is work that needs to be done before we can be sure that we can love the bomb - the demographic one that is giving us longer and healthier lives - rather than fear it for the costs that it will bring. Copyright © 2002
Global Action on Aging |
