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Britain is growing old and we’re not ready

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Author: Carly Chynoweth,
First published: The Times, 22/05/2009

Until 2005 George Magnus carried out the usual tasks of an investment bank’s chief economist: analysing retail sales figures, employment data and other issues affecting the market in which his employer, UBS, operated. But four years ago he swapped his routine of daily reports to start watching the horizon for the next big issue that could reshape both the market and the global economy. “I was looking out for the next climate change,” he said. What he found was demographic change: the economic threat of an ageing population.

Baby-boomers hitting retirement may not sound exciting next to the threat of countries disappearing into the ocean or drought wiping out food crops, but the threat is real and the results could be expensive. Mr Magnus puts this into context by explaining that the cost of cleaning up the banking crisis will be up to 25 per cent of GDP, but that the cost of the UK’s ageing population – the next four decades of pensions, healthcare, disability benefits and residential care – will cost 330 per cent of GDP.

The Government may not have to spend all this at once, but still it will have to find an enormous amount of money to deal with a situation that is not getting the attention it should. Mr Magnus is doing his bit to help to focus people’s minds: his book The Age of Aging, was published recently and he spent time last week talking to pensions ex…more