5th May 2014
Scotland has been warned that it must face up to some profound demographic challenges with its population likely to fall 3.5% by 2037 putting huge strain on its financial resources given an ageing population. The International Longevity Centre points out that this is in marked contrast to England which will see a rise of 5% in the same period.
The ILC-UK says that assuming employment rates by age remain the same, this implies a fall of 45,000 (-2%) in total employment compared with a 1.7 million (+6%) rise across the UK as a whole.
In the year 2014, it is anticipated that there will be 19 more babies for every 1,000 women aged 30-34 in England than in Scotland.
Since 1981 at birth, male life expectancy in Scotland has been around 2 years shorter than across the UK as a whole. However, to help ensure continued economic growth, Scotland will need to support longer working lives.
At birth disability-free life expectancy for males in Scotland is below State Pension Age and four years shorter than for the UK as a whole. It will therefore be particularly critical that Scotland addresses problems associated with health and disability in order to support longer working lives.
Over the next two decades the dependency ratio (the ratio of non-working age people to working age) will rise by 40% in Scotland by comparison to a 30% rise in the UK.
The report entitled ILC-UK ‘Population Patterns’ event was launched in Edinburgh as part of a broader series of events with support from Partnership Assurance.
“Scottish Independence -Charting the implications of demographic change” argues that Scotland must work to extend working lives and improve health if it is to respond adequately to the challenges of an ageing society.
It warns that Scotland should not seek to rely on the revenue from oil and gas to fund the costs of ageing as this is anticipated to fall from an historic average of £5.5bn per annum during the years 1980-2013, to around £2bn during the period 2014-2041.
ILC-UK points out that the combination of an ageing population and declining revenues from oil and gas extraction is likely to place downward pressures on government spending as well as upward pressures on taxation.
Richard Willets, Director of Longevity at Partnership said: “With a rapidly aging population, longevity is steadily moving up the news agenda and the potential impact of any changes are becoming an increasing concern for government. Therefore, it is vital that this becomes part of the general discussion when independence is considered and positive steps are taken to deal with demographic challenges such as the falling working age population.”
David Sinclair, Assistant Director, Policy and Research at ILC-UK added: “The demographic challenges facing Scotland are similar to many other nations. But some of the challenges are starker than for other parts of the UK. Against this backdrop, economic policy will need to incentivize longer working lives and policymakers will need to deliver increased investment in capital to improve the productivity of the workforce and drive economic growth. Policymakers must ensure that significant attention is paid to improving health in Scotland.”