Personal Finance

UK natural population set to start to decline by 2025


The natural population of the UK will begin to decline by the middle of the decade, leaving the country dependent on migration to increase the working-age population, according to new data.

Falling birth rates and an ageing population mean more people will die than are born annually by 2025, marking a long-term reversal of a historic trend, showed projections released on Wednesday by the Office for National Statistics.

The figures indicated that the population of the UK was also ageing faster than expected, fuelling concerns over the mounting cost of elderly care, pensions and health to the state.

Previous estimates, based on 2018 data, predicted deaths would not outstrip births until 2043. But in 2025-26, 4,000 more people will die than are born in the UK, according to the ONS.

“It lays bare the scale of the challenge we have in meeting the demands of the population, while maintaining the size of the state that we’ve been accustomed to in the past,” said Ben Zaranko, senior research economist at the Institute for Fiscal Studies.

While the size of the population overall will increase by 3.2 per cent in the next decade, this will be the result of a net 2.2m people immigrating to the UK, according to the ONS.

According to its projections, which are based on assumptions about fertility, mortality and migration, the total population taking into account migration would begin to shrink from 2058.

Madeleine Sumption, director of Oxford university’s Migration Observatory, said inbound migration tended to increase the working-age population and could bolster public finances in the short-term.

“It looks like net migration will help the UK avert population decline — which is something that is very difficult for governments to manage,” she said.

But Sumption added that in the long run, net migration was not necessarily “a wonderful solution” to the ageing population. “It mitigates the pressures of ageing rather than solving them.”

By 2045, the ONS estimated the number of people aged 85 years and over will nearly double to 3.1m — 4.3 per cent of the population.

Among the questions the government faces in light of the shift is whether to fund additional state spending on older people through raising income taxes, or other means such as levies on rent, capital or pensions.

Alistair McQueen, head of savings and retirement at Aviva, said: “The state will face a rising bill for healthcare, social care and pensions,” adding: “People will face greater individual responsibility to provide for their longer, later life.”

While life expectancy is forecast to rise, the ONS revised down its projections compared to 2018. It now expects men and women in 2045 to live 0.6 years and 0.4 years less, respectively, than previously thought.

Jonathan Portes, an economics professor at King’s College London, said it was “not implausible” that the slowdown in life expectancy was due to a decade of austerity measures.

Over the next 10 years, the number of births in the UK would edge downward, the ONS said. It predicted the total population in 2045 would be 71m, 1.8m less than previous estimates.

Portes said that falling fertility rates could be linked to a lack of affordable childcare, poor employment and insecure housing which was stopping young people from having children.

“If your economic and social infrastructure isn’t such that young people can have as many kids as they would otherwise want to, you’re doing something wrong,” he said.

“We need to make this a society where low and middle income young people feel they are supported to have kids.” 



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