Why an ageing population is the greatest threat to society

Of all the threats to human society, including war, disease and natural disaster, one outranks all others. It is the ageing of the human population.

No invading army, volcanic eruption or yet undreamt of plague can rival ageing in the breadth or depth of its impact on society. Over the next half century the proportion of people aged 60-plus around the world is expected to more than double. By 2050, for the first time in human history, old people will outnumber child-ren on the planet.

In some developed counties the number of older people will be twice the number of children. The impact of this transformation will be felt in every area of life, including economic growth, labour markets, taxation, the transfer of property, health, family composition, housing and migration. And the "demographic agequake" is already under way.

Yesterday, as Britain buried its most famous grandmother, United Nations delegates were meeting in Madrid to consider the extraordinary pace at which the world is greying. The proportion of people over 60 throughout the world is due to rise from 10 to 22 per cent between 2000 and 2050. The fastest-growing age group is the over-80s, where women outnumber men by two to one.

The problem is older people depend on younger ones, not only for care and support but also for the economic productivity that ensures pensions can be paid and health and social costs met.

The "potential support ratio" – the number of people of working age per older person of 65-plus – has fallen from 12 to nine in 50 years and is projected to fall to four over the next 50 years. The burden on the young, economically and socially, will rise accordingly.

In Britain, the trend is less severe but the implications no less alarming. Between 2000 and 2025, the number of over-60s is due to rise by 44 per cent from 12.2 million to 17.6 million, according to the Office of National Statistics (ONS). Over the same period the population of working age is predicted to rise by only 9.8 per cent, from 36.8 million to 40.5 million.

Therefore, while today there are three workers for every older Briton, by 2025 there will be little more than two.

But some countries, such as Japan, with the longest life expectancy in the world, and those of southern Europe, face a sharper rise in elderly populations. By 2020, more than one in four Japanese will be over 65.

Not all is gloom, however. Kofi Annan, secretary general of the UN, pointed out that the "grey cloud" on the horizon had a silver lining. "Trees grow stronger over the years, rivers wider. Likewise, with age, human beings gain immeasurable depth and breadth of experience and wisdom," he said. "That is why older people should be not only respected and revered; they should be utilised as the rich resource to society that they are."

Nor is it clear that the growing ranks of the elderly will necessarily increase costs in all spheres. The Wanless Report on financing the NHS, commissioned by the Government and published in November 2001, pointed out that although healthcare costs rise with age – more than a third of spending on hospital and community health services is for people over 65 – the ageing of the population has "less of an impact on health spending than many people tend to think".

The reason for this is that about a quarter of all the healthcare someone consumes in their lifetime is spent in the last year of their life – whenever that should be – and the cost of this last year tends to fall with increasing age. A 1999 study in Scotland showed a person who died at 50 had an average £7,000 of health care in his or her final year of life compared with just more than £3,000 in the last year for a person dying at 90.

If this is true, the impact of an ageing population will be to postpone rather than increase health service costs. But there are several uncertainties. People's expectations are changing and those who are old in 20 years will be more affluent and are likely to be more demanding of treatments including new drugs, hip replacements and cataract operations.

Figures show that although the maximum lifespan of about 100 years has hardly changed in the past century, the proportion of people approaching the maximum has sharply increased. One of the great unanswered questions is whether increasing life expectancy will mean longer, healthy life expectancy or more years spent in declining health and increasing disability.

Research in America and Britain suggests the number of old people with severe disability is declining. But other evidence indicates those with minor problems may increase.

The 2000 Health Survey for England found 70 per cent of those aged 65-plus reported at least one longstanding illness and at all ages the numbers reporting chronic illness are higher than in the past. We are a less stoic nation than we were.

In fact, the Wanless Report concluded that over the next 20 years the ageing of the population was likely to have less impact on health and social care costs than technological change or workforce issues.

Nevertheless, the elderly will require care. As the retired population grows, the demand for residential and nursing home places is likely to rise- particularly as, in recent years, the number of places has fallen as home owners have quit the business to cash in on rising property values.

In the past, the elderly relied on their families for care but family ties have been weakened by increased mobility and rising divorce. In future, the elderly will be less likely to be married or cohabiting, according to the ONS, and more will live alone. Among those aged 85 and over living independently, one third need help climbing the stairs and one quarter with bathing.

The 1999 Royal Commission on Long Term Care estimated that the costs of caring for the elderly would quadruple in real terms between 1995 and 2051, from £11.1bn to £45.3bn. Future costs are uncertain, however, and could be anywhere between £28bn and £75bn. Only a small fall in levels of disability in the population would greatly reduce the costs.

The Royal Commission called on the Government to make all personal care, including washing and dressing, free, which would cost between £800m and £1.2bn a year now and rise to £6bn in 2051

The Government balked at this bill and compromised by offering free nursing care in England from last October and budgeted at a cost of £100m for the first six months. But the Scottish Parliament rejected the compromise and agreed to pay for all nursing and personal care, to be introduced from July, providing elderly people with an incentive to move.

The quality of our lives in our final years will depend to a degree on our incomes. Pensioners are better off than they were and, overall, will continue to become better off. But while some will be well off a large number, denied the benefit of an occupational pension, will find themselves close to the poverty line.

Last year the Chancellor, Gordon Brown, announced a pensioners' credit to tackle poverty in old age, which will ultimately add 1 per cent of GDP to the cost of financial support for the elderly.

The greying of the population poses a challenge to policy makers everywhere but it need not mean disaster. And in any case, for any country such as Britain where the growth in the elderly is outstripping the working population there is a possible answer: immigration. Germany passed a law earlier this year opening up the country to the limited immigration of skilled workers for the first time since the 1970s.

Younger people in work are a force for innovation, entrepreneurship and change. If Britain is to remain young in spirit, it may be time to look to labour markets overseas.