Young people to be hit hardest by UK’s ageing society, report suggests

Young people will be hit hardest by the failure of successive governments to focus on the financial and societal challenges caused by an aging population, a House of Lords report suggests.

They will need to plan and prepare to work longer and save more from a much earlier age, the Economic Affairs Committee said.

The report also reveals that the crisis in adult social care “remains a scandal” that urgently needs to be addressed.

Committee chairman Lord Wood of Anfield told the BBC it was a “struggle to find where in government the focus was on aging and the “transformational effects” it was going to have on people.

“Aging is something we just observe,” he told BBC Radio 4’s Today programme, adding: “We know that adaptation is the way forward.”

Policies used by governments to deal with the impact of falling fertility and rising life expectancy in the UK – raising the retirement age or increasing immigration for example – were not adequate solutions in themselves, the report said.

Getting more people in their 50s and 60s to stay or return to work “is essential”, the commission said, and the government must prioritize incentives to do so.

It also says an aging population will need more care workers, leaving fewer workers for other sectors of the economy.

There is “widespread ignorance” about the cost of retirement, he says, and the government should consider launching an education campaign – as well as exploring whether the UK’s financial services sector is equipped to support the population as they age.

Lord Wood said the Government and the financial services sector must devise “more innovative ways to get young people thinking about lives that they frankly cannot conceive of right now – when they are in their 80s or early 90s”.

“It will take them a long time to plan financially, at a time when we know young people are doing less financial planning,” he added.

“Raising the state pension age, which saves the government money but increases pensioner poverty because many people have already stopped working before their 60s, is a false idea.

“To successfully meet this challenge, the approach to financial management of young people today and tomorrow will need to change.”