How should policy-makers think about longevity?

As people live longer, public policy and public spending should pivot towards ensuring longer, healthier and more active lives. This includes a shift towards preventative healthcare and lifelong education.

Economists have been warning of ageing societies for decades. Globally, falling birth rates and rising life expectancy are leading to an increasing proportion of older people. In the UK in 1950, one in nine of the population was over 65 years old; today, it is around one in five. That share is predicted to reach one in three by the end of the century.

The implications of this for the economy are invariably seen as negative. More old people are expected to lead to higher healthcare and pension costs, lower GDP and a greater tax burden placed on a smaller working population.

But this negativity around an ageing society is curious. Over the last 100 years, the proportion of the population in England and Wales aged over 65 has risen from one in 16 to one in five – a near threefold increase. Over the next 50 years, it is predicted to rise to one in four – a much smaller increase.

No historical analysis points to this tripling in the proportion of older people as a factor affecting past UK economic performance. So why should going from one in five to one in four be so economically disastrous? Is an ageing society really such bad news for the economy?

The problem with the ageing society narrative is that it focuses only on a change in the age structure of the population. Instead, what we need to focus on is changing how we age. That is why demography is not our destiny. The key change is not the rising number of older people but the growing likelihood that the young will become the very old.

In 1922, a 20-year-old had only a one in five chance of making it to the age of 80. Even by 1972, the odds were only one in three. Today, a typical baby can expect to live into their early 90s and has a one in six chance of living to 100, according to the Office for National Statistics.

When considering the future, we should not be thinking about how to support large numbers of older people, but more about how to ensure that the current young and middle-aged become the healthiest ever older generation.

The challenge that we face is of a longevity society. Longer lives mean that we have to invest more in our future because if we live longer but in ever diminishing health, then our quality of life falls. Similarly, if we live longer but can’t work for longer, then our career earnings are spread more thinly and our standard of living falls.

Consequently, we need to pursue a three-dimensional longevity dividend. We already have longer lives: we now have to ensure that they are healthier and productive for longer.

One key change will be to support longer working lives. Currently, governments are trying to achieve this through the deeply unpopular step of raising the state pension age. But that on its own does not help people to remain productive for longer.

What is needed are measures to keep people in employment from 50 years old and over. That involves supporting healthy ageing through the healthcare system; a focus on education throughout life (an enormous opportunity for the educational sector); flexible working to support caring; policies that tackle ageism; and indexing retirement on healthy life expectancy.

That last requirement is not just fair but also provides an incentive for finance ministries to invest in later life health knowing that the benefits will feed back into GDP.

Even more dramatic changes are required to healthcare. The current system is based on intervention, but this does not work when the majority of diseases – including dementia, cancer, diabetes and others – are ageing-related.

With ageing, the important thing is to maintain health for longer, not to treat diseases when they emerge. But at present, only around 1% of health budgets are based on preventative health.

Governments need to respond by dramatically increasing public spending on preventative health, making greater use of artificial intelligence and personalised genetic testing.

They should also spend more on public health (focusing especially on diet and activity) and make significant investments in research and development around geroscience – the study of ageing – with its staggering potential for therapeutics aimed at helping us to age better. To spend ever more on treating ageing-related diseases is a mistake: instead, we need to spend more to ensure that we remain healthy for longer.

One of the greatest achievements of the 20^th century was to reduce mortality risk, such that the majority of young people today can expect to reach old age.

If we fail to adapt by investing more in our future, we will experience an ageing society. But if we make lives not just longer but also healthier and more productive, then we can reap an economic longevity dividend.

We have long known that investing in the health and education of the young is important for economic growth. As life expectancy increases, the same holds true at older ages. We need to wake up to the reality of a longevity society.