Monday 10th December 2012 | 00:01

International Longevity Centre: Governments must wake up to the cost of longevity

International Longevity Centre press release

Governments must do more to reduce the long term cost of ageing to the public purse argues a new policy report from the International Longevity Centre UK (ILC-UK).

€œThe cost of our ageing society€, sponsored by Milliman, highlights the projected financial impact of the cost of the world's ageing population.

In the report, ILC-UK calls on governments across the world to consider linking eligibility ages of state pension to life expectancy and do more to ensure that the labour market is accessible to older people.

ILC-UK also argues that governments need to ensure pension systems are sustainable, allow for greater risk-sharing, and are less vulnerable to longevity risk. It also urges Governments across the world to consider how to create better conditions for health care innovation and development.

ILC-UK believes that governments need to prepare for uncertainty noting that Policy makers today are being asked to prepare for a future about which there is a serious degree of uncertainty and therefore sustainable policies will be the ones which can adapt to unexpected changes. It argues therefore that addressing the needs of ageing populations will require ongoing investment in research and data collection.

ILC-UK argues, however, that policy interventions must recognise the contribution that older people make to society and the economy. ILC-UK also points out that individual countries will need to ensure there are safety nets for those who cannot work longer.

Baroness Sally Greengross, Chief Executive of ILC-UK said: "€œOur ageing society will have significant impact on state spending on pensions, health care, long-term care and unemployment benefits. Across the world, people will need to continue to work longer as a result. In the UK and across the world we will also have to innovate in health and deliver a sustainable funding settlement for social care." 

Emma McWilliam, Editor Longevity Risk and Consulting Actuary Milliman said: €œIntergenerational collaboration is key, especially given high rates of youth unemployment. If those at working age are not employed, simple old age dependency ratios do not show the complete picture to Governments on how best to deal with the challenge ahead. Additional measures such as Labour Market Adjusted Ratios, as set out by the European Policy Centre, that effectively encourage policies around employment are definitely a step in the right direction to build public policy that reflects the current demographics and needs of all generations in our future society."€

David Sinclair, Assistant Director, Policy and Communications at ILC-UK added "Governments across the world must not ignore the future costs of our ageing society. These costs won'€™t just go away. Drifting along is not an option and does not benefit future older or younger people. Policymakers must urgently look to solutions to the long term challenge of mitigating the increased cost of an ageing society."