Briefing Note 46 - How much will pensions and long-term care cost in the future?
For countries with ageing populations, the costs of pensions and long-term care are likely to increase. In the UK, the Pensions Act 2007 together with the Pensions Bill 2007/8 (currently making its way through parliament) would complete the Government’s reforms to state and private pensions. However, there has been little consideration of the combined effects of such reforms. For example, the potential for extra spending in one of these areas to be offset by savings in the other has not been addressed.
To help improve our understanding of the complex relationship between pensions and long-term care, the New Dynamics of Ageing programme is funding the Modelling Ageing Populations to 2030 Research Group, an inter-disciplinary team, bringing together the PPI with experts from the London School of Economics, the University of East Anglia, the University of Leicester and the London School of Hygiene and Tropical Medicine. The project aims to produce long-term projections of expenditure on pensions and long-term care up to 2030 and beyond, on a consistent basis, which should help inform public debate and the development of future policy.
This Briefing Note sets out some preliminary results and highlights the importance of considering both policy areas together. Using projections from existing models, it shows that around 8% of GDP will be spent by government providing pension income and care to older people by 2050, compared to less than 6% of GDP today.
The MAP2030 Research Group, is funded under the New Dynamics of Ageing Programme, a cross-council research programme involving the Economic and Social Research Council (ESRC), the Medical Research Council (MRC), the Arts and Humanities Research Council (AHRC), the Biotechnology and Biological Sciences Research Council (BBSRC) and the Engineering and Physical Sciences Research Council (EPSRC).
To download Briefing Note 46, please click here.
Keywords: Long-term care, informal care, domiciliary care, state pension, state pension age, SPA, care home, MAP2030, Map 2030, projection, demography, care, pensions bill, state spending, ESRC, GDP,