AER0017

Written evidence submitted by the International Longevity Centre-UK (ILC)

 

About the International Longevity Centre-UK (ILC)

  1. The International Longevity Centre-UK (ILC) is the UK’s specialist think tank on the impact of longevity on society, and what happens next. ILC was established in 1997 as one of the members of the International Longevity Centre Global Alliance, an international network on longevity. We are submitting to this call for evidence because we want a society that works for everyone, regardless of their age, but also regardless of their gender, their ethnicity, their sexual identity, their abilities or their beliefs.

Not everyone is benefitting from increasing longevity

  1. One of the UK’s great achievements is that people are living longer than they did just a few decades ago. But not all people have benefited equally from this increased longevity. Inequalities can be seen in different parts of the UK, manifesting themselves in shorter working lives, higher healthcare costs, higher welfare payments and income poverty:
  1. These inequalities have been further exposed and exacerbated during the COVID-19 pandemic. According to ONS data, among people aged 50 or over, those living in more deprived areas; those who have never worked or are long-term unemployed; those with no qualifications; and those who do not own their own home are all less likely to have had their first dose of the COVID-19 vaccine and more likely to be vaccine hesitant than their more socio-economically advantaged counterparts.[5],[6]
  2. The Centre for the Study of Financial Innovation (CFSI), in partnership with ILC and The Business School at City University, London, have recently conducted research using an innovative new way of measuring inequalities that links health to wealth and the economy.[7] The research imagined a situation in which each local area is responsible for financing its own health and welfare services, including the state pension, and that the tax base is people’s earnings. In this scenario, a local tax would be levied to cover healthcare costs, welfare benefits for those sick and unable to work, and state pensions.
  3. The findings indicated that the average imputed tax rate across all regions would be 26%, but that these tax rates would range from 21% to 34% between the most advantaged and disadvantaged districts.[8] This therefore puts an economic cost on inequalities – and one that is felt by everyone, including the wealthiest in society.
  4. Good health is a necessary condition for reducing this inequality. Areas with the lowest WLE also have the lowest HLE, meaning that poor health is likely to be the biggest obstacle to working longer. Therefore, policies aimed only at extending life without extending health are likely to be expensive and counterproductive. In fact, a two-year increase in life expectancy with no other changes would increase the average tax rate from 26% to 29%.[9]
  5. Improving HLE, however, by one year would lead to an approximate 3.4-month increase in WLE and a 4.5-month increase in LE – therefore supporting longer working lives and healthy retirements.[10] Good health also reduces the cost of services such as health and social care. As a result, increasing HLE by two years would reduce the average tax rate by around 1%.[11] Finally, better health outcomes after retirement would also enable higher participation in non-remunerated activities, such as volunteering or caring.[12] Therefore, not only do inequalities cost everyone, but addressing them through promoting better health outcomes would have a financial dividend for all regions.

COVID-19 has disrupted and increased inequalities in retirement income security

  1. Intergenerational inequalities in retirement income remain prevalent in the UK and have been further increased by the pandemic. For example, among Generation X (those born between 1965 – 1985):
  1. Some groups in society face particular challenges in preparing for retirement:
  1. Without urgent support, the reality will be widening inequalities, severe financial hardship and even pensioner poverty for many of the next generation of retirees.

Older people have been locked out of working, earning and spending by the pandemic

  1. During the COVID-19 pandemic, older people have been disproportionately locked out of working and spending:
  2. This doesn’t have to be the case. Many of the barriers to older people’s economic contributions are avoidable – the most important being poor health:
  3. Addressing barriers to spending and working for longer could add 2% to UK GDP every year.[27] Therefore, an equal recovery from the pandemic will rely on older people being supported to return to work and spend in safe, age-friendly environments.

Recommendations

  1. Invest in health:
  2. Encourage and enable longer working lives:
  3. Support retirement planning among disadvantaged groups:

References

6

 


[1] International Longevity Centre-UK (ILC), 2021. Making the extra years count – Inequalities in disability and dependency with increasing longevity. https://ilcuk.org.uk/making-the-extra-years-count/

[2] International Longevity Centre-UK (ILC), the Centre for the Study of Financial Innovation (CFSI) and The Business School, City University, London, to be published 2021. The cost of inequality – Putting a price on health. https://ilcuk.org.uk/the-cost-of-inequality-putting-a-price-on-health/ [Not yet published, accessible from 5 July 2021]

[3] International Longevity Centre-UK (ILC), the Centre for the Study of Financial Innovation (CFSI) and The Business School, City University, London, to be published 2021. The cost of inequality – Putting a price on health. https://ilcuk.org.uk/the-cost-of-inequality-putting-a-price-on-health/ [Not yet published, accessible from 5 July 2021]

[4] International Longevity Centre-UK (ILC), the Centre for the Study of Financial Innovation (CFSI) and The Business School, City University, London, to be published 2021. The cost of inequality – Putting a price on health. https://ilcuk.org.uk/the-cost-of-inequality-putting-a-price-on-health/ [Not yet published, accessible from 5 July 2021]

[5] Office for National Statistics, 2021. Coronavirus and vaccination rates in people aged 50 years and over by socio-demographic characteristic, England: 8 December 2020 to 12 April 2021. https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthinequalities/bulletins/coronavirusandvaccinationratesinpeopleaged70yearsandoverbysociodemographiccharacteristicengland/8december2020to12april2021

[6] Office for National Statistics, 2021. Coronavirus and vaccination rates in people aged 50 years and over by socio-demographic characteristic, England: 8 December 2020 to 12 April 2021. https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthinequalities/bulletins/coronavirusandvaccinationratesinpeopleaged70yearsandoverbysociodemographiccharacteristicengland/8december2020to12april2021 

[7] International Longevity Centre-UK (ILC), the Centre for the Study of Financial Innovation (CFSI) and The Business School, City University, London, to be published 2021. The cost of inequality – Putting a price on health. https://ilcuk.org.uk/the-cost-of-inequality-putting-a-price-on-health/ [Not yet published, accessible from 5 July 2021]

[8] International Longevity Centre-UK (ILC), the Centre for the Study of Financial Innovation (CFSI) and The Business School, City University, London, to be published 2021. The cost of inequality – Putting a price on health. https://ilcuk.org.uk/the-cost-of-inequality-putting-a-price-on-health/ [Not yet published, accessible from 5 July 2021]

[9] International Longevity Centre-UK (ILC), the Centre for the Study of Financial Innovation (CFSI) and The Business School, City University, London, to be published 2021. The cost of inequality – Putting a price on health. https://ilcuk.org.uk/the-cost-of-inequality-putting-a-price-on-health/ [Not yet published, accessible from 5 July 2021]

[10] International Longevity Centre-UK (ILC), the Centre for the Study of Financial Innovation (CFSI) and The Business School, City University, London, to be published 2021. The cost of inequality – Putting a price on health. https://ilcuk.org.uk/the-cost-of-inequality-putting-a-price-on-health/ [Not yet published, accessible from 5 July 2021]

[11] International Longevity Centre-UK (ILC), the Centre for the Study of Financial Innovation (CFSI) and The Business School, City University, London, to be published 2021. The cost of inequality – Putting a price on health. https://ilcuk.org.uk/the-cost-of-inequality-putting-a-price-on-health/ [Not yet published, accessible from 5 July 2021]

[12] International Longevity Centre-UK (ILC), the Centre for the Study of Financial Innovation (CFSI) and The Business School, City University, London, to be published 2021. The cost of inequality – Putting a price on health. https://ilcuk.org.uk/the-cost-of-inequality-putting-a-price-on-health/ [Not yet published, accessible from 5 July 2021]

[13] International Longevity Centre-UK (ILC), 2021. Slipping between the cracks? Retirement income prospects for Generation X. https://ilcuk.org.uk/slipping-between-the-cracks/

[14] International Longevity Centre-UK (ILC), 2021. Slipping between the cracks? Retirement income prospects for Generation X. https://ilcuk.org.uk/slipping-between-the-cracks/

[15] International Longevity Centre-UK (ILC), 2021. Slipping between the cracks? Retirement income prospects for Generation X. https://ilcuk.org.uk/slipping-between-the-cracks/

[16] International Longevity Centre-UK (ILC), 2021. Slipping between the cracks? Retirement income prospects for Generation X. https://ilcuk.org.uk/slipping-between-the-cracks/

[17] International Longevity Centre-UK (ILC), 2021. Slipping between the cracks? Retirement income prospects for Generation X. https://ilcuk.org.uk/slipping-between-the-cracks/

[18] International Longevity Centre-UK (ILC), 2021. Slipping between the cracks? Retirement income prospects for Generation X. https://ilcuk.org.uk/slipping-between-the-cracks/

[19] International Longevity Centre-UK (ILC), 2021. Slipping between the cracks? Retirement income prospects for Generation X. https://ilcuk.org.uk/slipping-between-the-cracks/

[20] International Longevity Centre-UK (ILC), 2021. Slipping between the cracks? Retirement income prospects for Generation X. https://ilcuk.org.uk/slipping-between-the-cracks/

[21] Office for National Statistics (ONS), 2021. Living Longer: Older workers during the COVID-19 pandemic. https://www.ons.gov.uk/releases/livinglongerolderworkersduringthecovid19pandemic

[22] Office for National Statistics (ONS), 2021. Living Longer: Older workers during the COVID-19 pandemic. https://www.ons.gov.uk/releases/livinglongerolderworkersduringthecovid19pandemic

[23] Learning and Work Institute, 2021. Preventing long-term unemployment among older workers after coronavirus. https://learningandwork.org.uk/news-and-policy/preventing-long-term-unemployment-among-older-workers-after-coronavirus/

[24] International Longevity Centre-UK (ILC), 2020. Health equals wealth: The global longevity dividend. https://ilcuk.org.uk/HealthEqualsWealth/

[25] International Longevity Centre-UK (ILC), 2020. Health equals wealth: The global longevity dividend. https://ilcuk.org.uk/HealthEqualsWealth/

[26] International Longevity Centre-UK (ILC), 2020. Health equals wealth: The global longevity dividend. https://ilcuk.org.uk/HealthEqualsWealth/

[27] International Longevity Centre-UK (ILC), 2019. Maximising the longevity dividend. https://ilcuk.org.uk/maximising-the-longevity-dividend/

[28] UK All Party Parliamentary Group (APPG) on Longevity, 2020. The Health of the Nation: A Strategy for Healthier Longer Lives. https://documentcloud.adobe.com/link/review?uri=urn%3Aaaid%3Ascds%3AUS%3A61db2ed6-ffc7-4807-8454-5d3842598a6f

 

June 2021