The costs of demographic change – an EU obsession?

 The European Union’s massive 2012 Ageing Report, published on 15 May and promptly endorsed by national governments, warns darkly of the impact of demographic change in driving up age-related public expenditure, and undermining the sustainability of government finances, in the context of the current financial crisis.

The same themes run through a lot of recent EU work – President Barroso’s EU2020 strategy, the 2012 Annual Growth Survey, and this spring’s Pensions White Paper.  

Ambitiously presenting a projection for 2010-2060, the 2012 Ageing report suggests that “age-related expenditure” will increase by 4.1% of GDP, counting pensions (+1.5%), health expenditure (+1.5%), and long term care (+1.1%).   Altogether, age-related expenditure accounts for 25% of GDP, and about 50% of general government expenditure, so we are talking big stuff, and small adjustments can have big consequences.

The EU seems to focus almost obsessively on demographic projections.  The numbers of Europeans over 65 will double by 2060, from 87.5m to 152.6m, and the 85+ will triple from 23.7m to 62.4m.   But the report does not acknowledge that the older people of 2060 are children today. When we reach 2060, will they have the same needs as older people today?   Will they have the same demands on public expenditure?   These are unknowns, so projecting from today’s needs seems inherently flawed. 

The age dependency ratio, which the EU  solemnly shows as doubling by 2060 (from four working age people to two, to every ‘retired’ person), assumes that those aged 20-64 are active in the labour market and that the 65+ are passive and dependent. 

But older people today contribute greatly to their communities as volunteers, to their families as grandparents, and to the economy as consumers. The EC makes no attempt to monetize these contributions – let alone project them over the next 50 years – so they are not included in their calculations. It is naive and one-sided to talk of the dependency ratio, without understanding these important contributions.

Looking forward, the increasing dependency the EU fears could be mitigated by smarter policies to promote  working longer prevent illness and reduce care needs. 

Economic growth, the answer to everyone’s prayers, will not flow from its historical engine – an increase in the number of young workers entering employment.   Instead we have to invest in the productivity of our existing labour force, and grow the silver economy by designing better products and services for older people.  The proposed European Accessibility Act is an opportunity to do this.

The EU’s 2012 Ageing Report is a proper call to action, but it should not drive cuts in health and pensions spending.   Other smarter policies can help manage demographic change and give Europeans the opportunity to live longer, more fullfilled lives which our ancestors would never have dreamed possible.

Find out more about Age UK’s European work

Read another blog contributed by Mervyn Kohler




Solidarity between Generations – turning a European ideal into a UK reality

This Sunday 29th April is the 4th European Day of Solidarity between Generations.

Solidarity between generations has firm foundations at European level – enshrined in Article 3 of the EU Treaty, right up there with gender equality and the rights of the child.  It also features in the theme of this 2012 European Year, for Active Ageing and Solidarity between Generations

But what does this European ideal really mean, for us personally and for society in the UK?

A recent survey of ageism across Europe, commissioned by Age UK, explored perceptions of 55,000 Europeans aged 15-95, across 28 countries.  It found that younger people are more likely to be seen as a physical threat – to commit crimes, for example; while older people are more likely to be seen as an economic threat – a burden on health and public services.

These perceptions echo media stereotypes – particularly trenchant in the UK – of younger people as knife-wielding hoodies and older people as hospital bed-blockers.

If we want to live in an inclusive society, it’s important to challenge stereotypes like these, to break down barriers and reduce perceptions of threat.  Research shows that a powerful way to do this is to foster relationships with others who are seen as belonging to a different group.

So building intergenerational relationships is key.  This is a central objective of the 29 April European Day, and the 2012 European Year.  And there’s a lot happening in the UK, particularly around digital inclusion, to build on the European theme and bring generations together.

Age UK London, the Department for Work and Pensions and  the European Commission are holding a Spring Online event – inviting 50 older people in a digital clinic at Europe House in London, to get help with mobile phones, mp3 players, computers and social networking, from younger volunteers.

Age UK and YouthNet are also working together, as joint official charities for the 2013 Virgin London Marathon, on Run For It – a cross-generational project to end isolation and loneliness for older people, teaming young volunteers and older people to be trained in digital media.

And Age UK’s sister charity HelpAge are launching a new international campaign, Make it Ageless, to inspire young Europeans to campaign with and for older people in developing countries, living in poverty and isolation.

These are just three examples – AGE Platform Europe and the Beth Johnson Foundation in the UK are doing lots more to promote solidarity between generations , and show age is no barrier!

Read more about the EU Day of Solidarity between Generations

Find out more about Age UK’s European work