Ageing Population
Ageing population is rising, in the next 20 years more than third of the UK’s population will be over 55. People are living longer and staying healthy until later in life. There has been initially ageing population in the MEDC (more economically developed countries) and recently in the LEDC (less economically developed countries). The cause for this is that we are living longer and having fewer children. Projections suggest by 2014 over 65 year olds will take over the under 16s and by 2025 the majorities over 60s will have passed the under 25s for the first time. Official UK projections suggest that population over 60s male and female can live another 24 to 27 years. We are staying healthier until an older age something health experts refer to as ‘compression of morbidity’ meaning that the majority of us will only suffer severe age related illnesses in the last year or so of life.
Older people are a benefit, rather than a burden to the economy and society. In the 1980s and 1990s estimates indicate that just 0.2% of the annual increase in NHS spending was caused by population ageing. Even though the current figure is in the order of one per cent per annum such cost increases have been outweighed by the positive contribution of £40 billion that adults aged 65 and over made to the British economy in 2010. It is estimated that by 2030 retired ‘baby boomers’ will contribute £80 billion to the economy.

Pension saving is a classic economic problem of allocating scarce resources. There are two dimensions to this problem. First the pension saving decision that faces a particular individual. Every year the individual wants to buy goods and services. Whilst working, he can pay for these using the money he earns. But what happens when he retires, he still needs to buy things but he does not earn any money to buy them with. What he will probably want to do is save some of the money he earns during his working life and uses this to buy goods when he is retired. This is known as consumption smoothing. Every year of his life, the individual makes a decision – how much of what he earns will he spend this year and how much does he want to save to pay for things another year. This is the basic theory behind the lifecycle model in economics, which says that individuals take all present and future income, needs and costs into account when choosing current consumption.
In my opinion I think the government should let retired pensioners start working again.
Kamel ahmed