Preparing for an Ageing Society (Economic Affairs Committee Report)
Friday, 4 September 2026
Contributions
Motion to Take Note
Moved by
Lord Liddle
That this House takes note of the Report from the Economic Affairs Committee Preparing for an A geing S ociety (2nd Report, HL Paper 236, Session 2024–26).
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
My Lords, before we start, I want to make a short statement. As set out on Today’s Lists , speeches in all three debates should be limited to three minutes, with the exception of those of the movers, winders and Ministers. I know from experience that if everyone goes over by just a few seconds, those seconds mount up. I am sure I speak on behalf of Members across the House when I say that I would be grateful if Members could stick to the advisory speaking time to ensure that the Ministers have adequate time to respond to the points raised in each of the debates today.
Lord Liddle (Lab)
My Lords, it is a great privilege and pleasure to introduce this report on behalf of the Economic Affairs Select Committee of the House in place of our former chair, my noble friend Lord Wood of Anfield. He has, as the Salvationists would say in the 19th century on the death of one of their senior members, been promoted to glory, which in his case is ministerial office as one of Ed Miliband’s Foreign Office Ministers. I have known Stewart for more than two decades. He demonstrated a very high level of intellect by his appointment as a fellow of Magdalen at a young age. When I was in No. 10, he was a member of Gordon Brown’s council of economic advisers. Although we did not agree on every aspect of government policy, we were both committed European social democrats and were fascinated by the lessons for Britain of post-war Germany. He has been a great chair of our Select Committee to work under, and we owe him a lot. No report is ever produced without the contribution of the clerks, the expert advisers, our technical and administrative support, and our witnesses. This whole operation was brilliantly orchestrated by our committee clerk, Matthew Manning, to whom I also pay tribute. We learned a lot from many excellent witnesses. To pick on one is unfair, but I will take the liberty of breaching that rule by paying tribute to Charles Goodhart, the former Bank of England economist. His brother William was a distinguished Member of this House, whose contribution at the age of 89 lost nothing in its clarity and pungency. He is a great exemplar of why we should not be pessimistic about the possibilities of an ageing society. I also pay tribute to other members of the committee, including those rotated off before this debate. The UK is a rapidly ageing society. The numbers are striking. The Office for Budget Responsibility’s projections say that the old age dependency ratio—that is, the number of people above the state pension age relative to the number of working people—will rise from approximately 31% now to 38% in 2050 and 47% in 2074. Indeed, in the years of the Conservative Governments from 2010 to 2024, the population aged over 65 rose from something like 16.5% to 19%. The decline in fertility rates is even more striking. In 1964, a peak fertility rate of 2.93 children per woman was achieved. This has fallen precipitously. In 2023, it had reached a new low of 1.44 in England and Wales and 1.25 in Scotland. The long-term replacement rate is 2.08, so we can see the basis of the demographic crisis. We heard from our witnesses that the prospects for raising the fertility rate are dim and that policy attempts elsewhere to do this have failed. That was a great disappointment to me, because when I worked for the President of the European Commission two decades ago, we had confidence that the adoption of Nordic-style family-friendly policies—subsidised childcare, gender equality and more equally shared responsibility for bringing up children between men and women—would help sustain an adequate fertility rate. Sadly, that has not proved to be the case. Immigration is likewise not the panacea that in some quarters it is made out to be. It might help if immigration were circular—that is, immigrants returning home as their countries become more prosperous, which to some extent has happened with eastern European immigration. The problem with the immigration from further afield that Britain has experienced since 2019 is that families are more likely to settle here permanently, adding in the short term to public spending costs but not adding to demographic sustainability in the longer term, as second-generation birth rates tend to adjust to UK norms. Among our witnesses, people were optimistic that the change in profile of the population is manageable. However, the rate at which it is occurring could pose substantial challenges, though it is worth highlighting that some of that is the result of a great success story. Rising life expectancy is something to be celebrated—for girls born today, life expectancy is 90, while for boys it is 86.7—but there is a worrying gap between life expectancy and healthy life expectancy. Healthy life expectancy has actually fallen in the last couple of years. There is already a huge north-south gap emerging; for instance, the gap in healthy life expectancy between London and the north-east is seven years. These are very worrying trends. The fiscal picture is also stark. In its Fiscal Risks and Sustainability 2025 report, the Office for Budget Responsibility—for which I have great regard, unlike some other people—says that by the early 2070s, on current policy settings, borrowing will be pushed up to a clearly unsustainable 20% a year, and debt will rise to over 270%, which again is clearly unsustainable. We are not alone in facing this challenge, but that is no source of comfort. The fact that others will be grappling with the same issues could increase competition between nations over a dwindling workforce, at the same time as our economy will be struggling. This is about more than just the current elderly. The current young population will become the older generation of the future; indeed, thanks to the increases in life expectancy, they will be older for longer. Yet demography is not destiny. One key conclusion we reached is that the Government need to focus on the older economically inactive who are below state pension age, and I think these facts are not particularly well known. Discussion of raising the state pension age to deal with this problem is, in our view, misplaced. Those still working at the point of state pension age are entitled to claim it but are in fact highly likely to continue working beyond it. The focus has to be on those who exit the workforce before reaching the state pension age. This is the scale of the problem: at the age of 50, 80% of the age group are still in work, but at the age of 65 the participation rate has fallen to 25% to 30%. That catastrophic fall in the participation rate is the public policy challenge that we feel needs to be addressed. Simply to raise the state pension age would plunge a significant number of people in that late-60s bracket into poverty, as happened when the pension age was raised from 65. The Government are beginning to think hard about how to promote workforce participation at the other end of the age spectrum, among young people, with the brilliant Milburn review, which is greatly to be welcomed as an outstanding contribution to public policy. However, we hear nothing, or very little, about the scale of what is required to prepare an ageing workforce for those in their mid-50s to mid-60s. The Government’s response is their mid-life MOT programme and targeted jobcentre support for older job seekers. All that is welcome but it hardly seems an ambitious enough response to this crisis, and that is a crucial conclusion of our report. There are a number of reasons for people to leave the workforce at older ages, which present policy does little to address. Some are benign. People want to stop working if they have the financial resources to do so. Unfortunately for the Treasury, these are often those who contribute the most in taxes, and the Government need to find ways of incentivising these people to remain in or return to work. However, we also heard about those who want to work but are unable to do so because of caring responsibilities, either to ageing parents or to dependants. We recognise that this is a priority for the Government and we are looking forward to the recommendations of the commission that the noble Baroness, Lady Casey of Blackstock, is working on. But you cannot help noting that a number of these grand reviews have been held in the past, with very little action taken. Let us profoundly hope that the Casey review will be the last before concrete policies are announced and enacted. There has obviously been some focus in discussion on reforming the triple lock. This has proved an expensive driver of real-terms increases in the state pension, due to the recurring volatility of both inflation and earnings, which have led to real-terms increases. Linking pensions to earnings—that is, to the living standards of the working population—is estimated to save some £15.5 billion. That is a significant sum of money. It would take the defence budget up by over 0.5% of GDP. But in our report, rather than focus on that, we have chosen to focus on the much longer-term issue of raising labour force participation among those over 50. The continued yearly focus on the Budget, and the Government’s fiscal headroom and all that, means that there is a danger that we lose sight of the far more serious long-term issues. I am afraid that nothing in what the Government had to say reassured us in this regard. The Cameron Government, to their credit, made the ageing population one of the subjects of their foresight studies, but this was lost in the aftermath— I would say “chaos”—of Brexit. The present Government, in response to our recommendation that they publish an overarching strategy statement setting out how they plan to address the challenges of an ageing society in a cohesive way, said that an “integrated approach” was “preferable to a single standalone strategy”. I do not know quite what that means. They went on to say that they were taking “a strategic and cross-cutting approach to issues relating to an ageing society”. Well, without some clear statement of what the strategy that underpins the purported integrated approach is, I find this answer devoid of significant and substantial content. The lack of any published strategy on ageing is a worrying indication that the Government would prefer not to face up to these challenges as an immediate question, and that the UK is therefore woefully unprepared for the future. This is a harsh conclusion, but the point of having Select Committees is to point out difficult conclusions that our politics is failing to address. On that basis, and with that reason, I beg to move.
Lord Lamont of Lerwick (Con)
My Lords, I begin by thanking the noble Lord, Lord Wood, for his outstanding chairmanship. I have already paid tribute to him at Question Time, and I do so very happily again today, because his job was brilliantly done. It is a pleasure to follow the noble Lord, Lord Liddle, who has summarised our report very comprehensively; he has not left much for anyone to say, even within three minutes. For me, the most important paragraph in the report was one referred to by the noble Lord, Lord Liddle. It is paragraph two, which refers to the OBR stating, as the noble Lord, Lord Liddle, emphasised, in its Fiscal Risks and Sustainability Report , an annual publication about ageing, that without a change in policy, government spending pressures will push up debt to “above 270% of GDP by the early 2070s”. Those are very alarming figures. Of course, many people will say that this will never happen, but it will not happen only if we take steps to prevent it happening. According to the OBR, age-related public spending will increase total spending by 10% of GDP by 2074. When you add debt interest on top of that, it will raise total government spending from 44.5% of GDP to 60% of GDP by 2073. Taxes are already at an all-time high. What would they be if spending were to reach 60% of GDP? What policies are there that can mitigate the apparent need for deep spending cuts or increases in taxation? The usual answer from a Government, of course, is growth, but alas, growth does not always happen and has not always happened in response to the exhortations of government. According to the OBR, immigration on any likely acceptable scale will not be sufficient to improve the debt dynamic. According to our witnesses, efforts to increase fertility rates in other countries have largely failed. Raising the pension age, which the Government intend to do, does save money but does not, as the noble Lord, Lord Liddle, emphasised, increase participation rates or promote longer working lives. One alternative, which is recommended in our report and accepted by the Government, is to increase labour force participation among those aged between 50 and pension age. Finding a solution to the problem of social care—which is an urgent problem in its own right, not just a financial problem—would help many of those in their mid-50s and 60s to remain at work. But a national care service modelled on the NHS, as suggested by the Prime Minister, could cost no less than up to £19 billion a year in 10 years’ time, so that will not help our fiscal problems. If we do not increase the proportion of older people at work, output per capita and the overall size of the economy will be lower, with fewer workers and higher pension payments. We have to improve productivity per worker and, at the same time, get more of the old to remain at work. It is not impossible. Over the past 100 years, the old age dependency ratio tripled, but it has not been a factor in holding back growth. In the past, we have adapted. Our report only scratches the surface of what is a huge subject. The ageing of society is transformational and will reach into every department, but the impact is felt only gradually, almost imperceptibly. We need a longer-term framework to allow well-informed development of policy to prepare for these profound changes. If we do not face reality, reality is going to face us.
Lord Burns (CB)
My Lords, I would also like to thank the noble Lord, Lord Liddle, for outlining the conclusions of the committee’s report so well, and thank the noble Lord, Lord Wood of Anfield, for chairing the committee during this investigation. He has now gone on to greater things and I hope he will have the opportunity to continue to deploy his considerable economic skills in that role as well. There is nothing new or recent about the phenomenon of an ageing population. This been going on throughout my working life, but it is now a major factor in the conduct of economic policy. In the mid-1960s, when I started work, there were fewer than 7 million people aged 65 or over. Today, that number is approaching 14 million and by 2050 it is forecast to reach almost 19 million. The increase in those over 85 is even more impressive. Over the same period, their number has gone from fewer than 500,000 in the mid-1960s to almost 2 million today. It is now forecast to reach 4 million by 2050. This is something to celebrate; it was one of the things we had to keep reminding ourselves of in the committee. It has been a remarkable measure of the progress that has been going on. But it does have consequences for fiscal policy. Our concern is that, despite this success, the proportion of people aged between 50 and 65—this was mentioned by the noble Lord, Liddle—either working or looking for work drops off considerably compared with the cohort just before them: the 35 to 50 age group. There has been some noticeable increase in the participation rate of those over 65, but it remains quite modest. It was these figures and the starkness of this that formed the basis for our report. It is clear that, unless working lives are extended, our successors will have to fund many more years of retirement than in the past. The report also emphasises the need to rethink our approach to lifelong financial planning for individuals; this is not just a matter for government but for individuals as well. As has been noted, the committee concluded that, from a fiscal point of view, the best response would be to encourage and incentivise those in their mid-50s to mid-60s to remain active in the workforce, but this would also require greater recognition of the valuable contribution that experienced people can make to the workplace. The issue of the growing number of people requiring health support and social care has been mentioned. As others have noted, the unsatisfactory arrangements for adult social care have been recognised for years, but no policy proposal has received the necessary support. Fundamental questions remain about service provision, our lifetime contributions, how we share costs between the state and the individual, and the potential role for insurance. Let us hope that the noble Baroness, Lady Casey, can unlock this puzzle. Finally, there is the testing question of pensioner incomes. The old system of indexing pensions solely to prices meant that pensioners did not automatically benefit from economic growth. However, the triple lock guarantees that the level of pensions will increase faster than earnings over time, but in an arbitrary and random way. This is a problem that must be fixed.
The Lord Bishop of Coventry
My Lords, I am grateful for the opportunity to speak on this important issue, and I thank the Economic Affairs Committee for its thorough and timely report. As we consider the prospect of a society where the people of older age vastly outnumber younger people, it is vital that we avoid framing our discussion primarily around the burden of the old to the young. We must continue to emphasise that the value of a person cannot be reduced to their fiscal contribution to the state, although I very much understand the pressures. As the report rightly notes, increased life expectancy is a welcome gift and one of the considerable achievements of modern society. I note that, when I began ordained ministry in 1997, I regularly conducted funerals for people in their 60s and 70s; decades on, they were much more frequently for people in their 80s and 90s. I wish to emphasise the way in which other cultures can teach us the value of older age from their perspective. For example, on a trip to Kenya in recent years, I was privileged to share in the birthday celebrations of an 80 year-old matriarch of a village, and I was bestowed the honour of a ceremonial feeding of the first taste of her enormous cake. I will never forget her jubilation, which was felt across the entire community present. Her life, in its longevity, intrinsic value and social contribution, was remarkable, and nobody there took that for granted. Sadly, here in the UK, we often speak of and treat older people as an inconvenience to be mitigated, rather than cherishing the wisdom and life experience they bring. As a young priest, I was trained to visit my congregation in their own homes—a practice continued throughout my parochial ministry to this day. What started as a visit for a cuppa ended with accounts of careers and achievements, such as the invention of the contact lens, expeditions to the summit of Everest, and a most memorable and gorgeous afternoon with an original character from “Call the Midwife”. Clearly, the flourishing of our civil society continues to depend on the time, generosity and commitment of older people, many of whom serve as volunteers, carers, mentors, trustees and community leaders in retirement. Without this, many organisations would struggle to survive and function. It is vital that local communities continue to have the support to provide the network of friendship and stimulation that helps older people remain connected and appropriately valued as they grow older. Examples across the country of excellent dementia cafés and bereavement and other support groups are a lifeline for many. I visited the church-run Memory Lane Café in Henley-in-Arden, where the lunch on Christmas Day is oversubscribed, with 100 people attending, who were very keen to let me know that it is a much-loved annual event. Finally, as the report explores, an ageing population requires a reframed understanding of retirement. The Church of England depends on an active workforce—as a Bishop, I am hugely grateful for their commitment. As we consider the extension of the working life, it is vital that we maintain the safeguards that protect sustainable patterns of work. That said, the challenges facing public finance, health services and social care are acute and must be addressed. I again thank the Economic Affairs Committee for its work. I urge the Government to ensure that, within this work, the value of older-aged people is not lost. As we prepare for an ageing society, we must not forget that such people are not merely recipients of care; they remain bearers of gifts, contributors to the common good and people of immeasurable worth.
Lord Reid of Cardowan (Lab)
My Lords, the report we are discussing was completed before I joined the Economic Affairs Committee. Therefore, I need feel no embarrassment in congratulating the committee on its work. It is prescient, timely and, to put it bluntly, a stark warning to this and future Governments that they will ignore at their peril. The noble Lord, Lord Liddle, summarised it very well. The UK is ageing rapidly—a sign of success. Longer life expectancy is a success, but falling birth rates mean that older people will form a larger share of the population. This will cause critical problems. This is on top of the problems of exponential growth of public expenditure and welfare that we already have. The noble Lords, Lord Liddle and Lord Lamont, pointed to a crucial paragraph. I will not repeat the statistics, but it illustrated just how far we will have to go to meet the challenges by 2074—roughly the next 50 years. If we do not meet those challenges, we will be in a crisis long before that. I believe this is a challenge, laid out in this report, that no responsible Government can refuse to recognise. There is another warning. As the noble Lord, Lord Liddle, said, simply increasing the state pension age will not cut the mustard; it will not provide the means to address the challenge the committee outlined. A greater priority should be helping people in their 50s and 60s remain in or return to employment, but this in turn requires better health and social care, flexible working, reduced age discrimination—something to bear in mind next week when we discuss the report from the Retirement and Participation Committee—and opportunities for lifelong learning and retraining. All these are outlined in this report, and I urge the Government to take them most seriously. If I have one disappointment, it is that the report did not more forthrightly consider and challenge the triple lock. I believe that is essential. Absent that analysis in the report, we have to rely on the good services of the noble Lord, Lord O’Neill, who has been forthright on it. I agree entirely with him. That issue would undoubtedly have to be part of the deliberations of the recommended Cabinet sub-committee and overarching strategy. Overall, the message is simple: the UK needs to prepare now. It is already later than it should be to start preparations. We need to treat longer lives as an opportunity rather than a burden. In the months and years to come, the Government cannot say that they were not warned.
Lord Wilson of Sedgefield (Lab)
My Lords, before we move on to the next speaker, I again insist that we keep to the three minutes, because every second is extending the time of the debate. We need to keep within the three minutes.
Baroness Bottomley of Nettlestone (Con)
My Lords, I shall do my best. I also warmly congratulate the committee. Many of the speeches already made have set out the situation, demography and all the rest of it. The United Nations has described population ageing as “a defining global trend of our time”. The changes taking place here and across the world will transform our workforce, public services, pensions and families. It is worth remembering that when the Queen came to the Throne in 1952, she used to send a telegram to everybody reaching 100. How many did she send in 1952? Some 300. That is the scale of the change. Sending that many telegrams now would be difficult, to say the least. We have to act now. The greatest improvement to our fiscal outlook will come not from simply increasing the state pension age but, as has rightly been said, from enabling more people in their mid-50s and 60s to remain in work. Healthy life expectancy in the UK has fallen by more than two years in the past decade. As the ONS figures show, it is at its lowest level since the present series began—a watershed moment. I will refer to Sir Charlie Mayfield’s Keep Britain Working review. We are growing older and living longer but getting sick sooner. This is not just a problem for the NHS; it is a problem for the economy. He identifies a profession that gets far too little recognition and understanding. It is mentioned in the report and the government response. It is the occupational health profession. As the report says: “In 2024 only 45% of workers had access to OH support … this falls to just 18% among small employers”. If we want to keep more people working through ill health, or returning afterwards, they are a critical group, helping people manage conditions, make adjustments, return after illness and avoid leaving employment altogether. The Centre for Ageing Better, which I applaud, estimates in its report on the looming retirement crisis that more than 900,000 people between 50 and state pension age are out of work but would like to be working. I must quickly shoot forward to the triple lock, because the noble Lord, Lord O’Neill, as has rightly been said, has been forthright—saying that it is “completely bonkers” and “very unfair” to younger generations—and we heard more from him this week. Sir Leigh Lewis, the distinguished former Perm Sec at the Department for Work and Pensions, wrote this in a letter to the Times recently: “Of all the policies for which I had some responsibility during my time in government, this was by far the worst. Left unchanged, it will bankrupt our children and grandchildren”. His conclusion was equally clear: politicians of all parties have a duty to admit that the triple lock policy is “unaffordable” and “has to change”. The other area in which I look to for courage is social care. The Prime Minister, with his people-pleasing approach, has said warm words about social care, but this is an incredibly costly programme. Healthcare has always been free at the point of use, but social care has always had an assessment of means. It is essential that there is a proper expectation of what the reality of a social care programme will involve. I hope somebody will produce coherence in this programme. I commend the report.
Baroness Wolf of Dulwich (CB)
My Lords, as a member of the committee which produced this report, I join others in congratulating the noble Lord, Lord Wood, putting on record my thanks for his outstanding chairing and my thanks to the committee staff. I want to emphasise one of the major conclusions, which the noble Lord, Lord Liddle, and others have highlighted and which I think was for many of us the major new insight: that we must concentrate on raising the participation levels of people in their mid-50s. This is really important. The UK has done pretty well at raising the state pension age, but just putting it up further is not a panacea, as others have explained. Doing that is very unlikely to increase employment levels among the pre-retirement cohort, where many have already dropped out of the labour market. Conversely, raising participation among these 55 to 65 year-olds would make a major difference to our economy, to the public finances and, in many cases, to people’s physical and mental well-being. As our witnesses confirmed time and again, working is really good for people, and being unemployed and economically inactive really is not. This country had a good record over the last few decades of providing jobs and keeping formal unemployment down, and there is now concern, rightly, over the impact of government policy, in both taxes and employment legislation, on employers’ willingness to hire and especially to hire the young. PAYE data shows a fall of 86,000 payrolled employees in April to June 2026, while workforce data shows a fall of 97,000 in the year to March 2026. Although we are very focused on the immediate problems, our participation rates over a longer period do not actually look that wonderful. At a time of lengthening life expectancy, it is true that total employment is up, but that is because of the size of the population. Overall employment rates have been pretty static this century: down a bit for men and up a little bit for women. Meanwhile, unemployment rates are down because of people simply dropping out of the labour market. Again, we know and heard from witnesses that, if you drop out in mid- to later mid-life, you are very unlikely to return. Meanwhile, part-time employment, which is especially attractive to older workers and those with caring responsibilities, has started to fall sharply. This is a major challenge for the Government, and I think that people have not really been aware of it. We asked them to set out their policies and to look at tax and other incentives but, as the noble Lord, Lord Liddle, said, the focus at the moment is very much on the young. The young really matter but, in our ageing society, people in their 50s and 60s matter too.
Baroness Nargund (Lab)
My Lords, I thank my noble friend Lord Liddle for securing this debate and for his brilliant opening speech. Having written and campaigned on declining birth rates since 2009, I will focus my remarks on the fertility aspect of this challenge. Last year, we had the lowest birth rate since 1977. My noble friend Lord Liddle has highlighted the statistics of a decline in birth rates and the policies tried elsewhere. I want to focus on an easy win. The Department for Education could implement this tomorrow at minimal cost to enable our young people to understand what affects their future fertility and how to protect their natural fertility. I am talking about an issue close to my heart: introducing fertility education into the school curriculum. Today, one in seven couples struggles to conceive. I have seen the emotional, physical and financial toll that this takes, as prospective parents fight for years to realise their dreams of holding their baby. In many cases, if these patients had better knowledge about their own reproductive health, the hardship of IVF and infertility could have been avoided. Within the education system, we need to teach both boys and girls in their late teens to understand the impact of their age and the lifestyle choices they make on their future fertility. In this age of social media, we know that more young men are looking to perfect their image online, but performance-enhancing drugs, including anabolic steroids and non-prescribed testosterone, can severely affect their fertility, not to mention the risks of smoking and excessive alcohol intake. Moreover, young women need to be aware that, if they become underweight, with a restrictive diet and excessive exercise to achieve a certain appearance, their hormonal and bone health could be affected, as could their future fertility. They need to know about their family history of menopause and its impact on their own age of menopause. We are failing to educate young people about their future fertility. I urge my noble friend the Minister to meet me to discuss how to develop fertility education modules in the PSHE curriculum to teach students how to protect their natural fertility and change their lifestyle. I have tried this. I introduced fertility education modules in some London schools, but I have failed to get that into the curriculum. Now is not the time to sit on our hands and argue that demographic shift is our destiny. It is the time for fertility education and for more babies.
Lord Redwood (Con)
My Lords, I was happy to support previous Conservative Governments in implementing the triple lock, and I support the current Government in honouring their promise. This has been a useful policy in reducing pensioner poverty. As one of the Members of this House probably keenest to control public spending, I am very conscious of cost, and I have regularly recommended that we should raise the state retirement age, which gives you a substantial reduction and is a fair way of achieving the savings. It is also very much in the spirit of this report, which I welcome; namely, that people in their 60s, unless there is disability or a serious health problem, should be encouraged to work, and they will probably have richer lives as a result. This is now possible because life expectancy is greater than when the lower state retirement pension ages were first set. More importantly, there are now very few people who do hard manual work. Clearly, they needed a much lower retirement age because they could not continue. Now people have hydraulics, automation and robotics, so it is much more feasible to carry on working for longer. Really, the most power or muscle pressure you now need is the ability for your fingers to press a touchscreen; you are then able to do most of the interesting jobs in our community. Those who wish to abolish the triple lock or make other changes to pension arrangements would be well advised to remind themselves that the pension is not a welfare benefit but an entitlement based on contributions to the national insurance scheme. Of course, that can all be changed, but it would require complex legislation and a lot of political argument. No Government to this day have been willing to attempt that, I suspect because it would be very unpopular with the public. The contributory principle is, to me, fundamental. It shows that people have to work and have to pay national insurance. There is an annual sign-off of the fund, with a review. It is a pay-as-you-go fund, not an endowment fund. It embodies a very important contract between generations: the working generation say that they will pay for their parents’ generation on the basis that their children, when they are working, will then pay for them. I do not want to disturb that social contract between generations; I want to keep the contributory principle—you get something for something—and I do not want to take away the triple lock. That would be a great pity.
Lord Turnbull (CB)
My Lords, we have two related debates in successive weeks. Next week we will debate the issue of long-term debt and, this week, we are addressing one of its main drivers: an ageing population. The main elements of this are well known. Older people are putting less into the Exchequer and requiring more assistance from it. There is a sharp decline in the fertility rate. In mid-life, the shape of careers is changing. The old model of education to, say, 16 or 18 and 40-plus years of work followed by a retirement of 15 years has largely broken down. Young people are staying in education longer and taking longer to find settled employment. Taken together, these developments are producing a sharp rise in the dependency ratio, leading to severe pressures on public finances. The EAC report looked at these developments and possible responses. It took the view that there has been significant change in the pension age, often going further than other countries, but that the scope for further rises is small. One change that should be made now—pace my noble friend Lord Redwood—is the abolition of the triple lock, which is, frankly, idiotic. Instead of a considered decision on how, over time, pensions should rise relative to prices or earnings, we have a chaotic system generating random windfall gains—and they are always gains—according to the movement of earnings and prices in particular years. The OBR has estimated that this could cost an extra 2% of GDP. The report is rightly sceptical that the Government should try, or would be able, to influence the birth rate. We could permit greater immigration but not only is this politically sensitive; the effect may only be short term as, eventually, immigrants adopt the work and family patterns of the host nation. This leaves two areas where government action can be justified. The one emphasised most strongly in the report is trying to improve the participation rate in the 50 to 65 or 70 age range. Technological change is affecting how long jobs last. Someone may find that the line of work they have been in for 30 years has ceased to exist and they are therefore likely to need help to change jobs and skills to find new work. Another issue, which gets less prominence in the report, is that many young people are finding it difficult after completing education and training to find fulfilling jobs. This is seen in the rise of the so-called NEETs to more than 1 million. It should be a priority to bring this number down. The policy response has been precisely the opposite of what is needed. Young people need incentives, mentoring and advice to help them into work, while we are in fact consigning them to the dead-end world of disability benefits. The course we are now on makes for sombre reading—there will be more of that next week—but we are not without responses that could improve matters. I hope we will take them up as a matter of urgency.
Lord Davies of Brixton (Lab)
My Lords, I welcome the Economic Affairs Committee report. I was of course a member of the committee, as can be seen. Most Members will know that you do not necessarily agree with everything in a report when you sign off on it but, in fact, on rereading it, I am quite surprised by how much I agree with. I thank my noble friend Lord Liddle for his introduction, but I must pick him up on something. He twice used the word “crisis” in relation to the challenges of an ageing society. The report specifically did not use “crisis” because, unlike financial and geopolitical shocks, demographic shifts are slow-moving and quantifiable decades in advance. The committee’s own projections run to 2074 and the key trends—falling fertility and rising life expectancy—are already fully visible in the data. That is an advantage. Policy can be phased, rather than improvised, and institutions can adjust incrementally, rather than under duress. There is also a precedent: we absorbed the post-war baby boom generation into education, housing, employment and, eventually, pension systems over several decades. Life expectancy rose substantially across the whole of the 20th century and retirement provision was adapted accordingly, however imperfectly. I will dodge the issue of triple lock except to say that, somewhat to my surprise, I totally agree with the remarks of the noble Lord, Lord Redwood, who gets it exactly right. We need a proper debate on the triple lock. The specific levers identified in the report—encouraging workforce participation, addressing the social care shortfall, improving productivity, expanding skills training and tackling misplaced assumptions about age and capability—are policy choices, not fixed constraints. What the report identifies as missing is not the capacity to respond but sustained political attention. There is an absence of a published government strategy or forum for addressing ageing as a standing priority. This is a remedial deficiency. Given the lead times available and a demonstrated historical capacity to absorb comparable transitions, the present challenge of an ageing society is not one without a solution, but one of sequencing and will.
Lord Tugendhat (Con)
My Lords, in the time available I will make just two suggestions—I hope to keep within the three minutes by doing so. The first I can dispose of very quickly: it is to add my voice to those of others who have urged getting rid of the triple lock. This innovation was much needed when it was introduced but has long since served its purpose and the Government should replace it without further ado. My second point concerns the issue, which has been widely discussed, of finding ways of bringing people in their 50s and early 60s back into the workforce. We all know that there are many reasons why people retire: the need to care for elderly relatives; ill health; tiredness; age discrimination—all sorts of things. Not everybody is susceptible to financial incentives. None the less, I ask the Minister whether he will explore ways in which the tax system might be used to bring people back into the workforce and to keep them there. In particular, will he look into whether the rate of income tax and national insurance might be lowered for those who continue in work above a certain age—say, 58 or 60? What it should be, I do not know; that can be decided only after the matter has been thoroughly looked into. If people could be incentivised so that their earnings were significantly increased in the time leading up to the state pension age, it might make a difference. I urge the Minister to look into this possibility and report back to the House in due course.
Lord Kakkar (CB)
My Lords, I join other noble Lords in thanking the noble Lord, Lord Liddle, for the thoughtful way in which he introduced this important report. I declare my own interests as chairman of the Office for Strategic Coordination of Health Research. This is not the first report of a Select Committee of your Lordships’ House that has identified important and common challenges attending ageing. A report in 2013 by a Select Committee on Public Service and Demographic Change, two committees chaired by my noble friend Lord Patel on the sustainability of the NHS and adult social care in 2017, and a Science and Technology Committee report on the science of ageing in 2021 all reached remarkably similar conclusions. As the noble Lord, Lord Liddle, has said, the increase in longevity is to be seen quite rightly as a tremendous success. But the real peril is the fact that healthy lifespan has not increased at the same rate, and that more and more of our population will be living with multiple co-morbidities and ill health for an extended period. That puts unsustainable pressure on the provision of healthcare, and it must now be addressed. Thirteen years of addressing this issue in your Lordships’ House has been attended by no meaningful government intervention or action; action is now urgently required. There is a good basis to act, because the science of ageing is now far better understood. The biological processes are better understood. We are now able to identify biomarkers associated with chronic inflammation that attend the development of many co-morbidities. Therefore, in a short time, we should be able to develop strategies to identify early in life those individuals at high risk for the development of multiple co-morbidities later in life, and to intervene in those in a targeted and precise way to reduce the occurrence of those diseases. In time, that will have a substantial impact on reducing the burden in the National Health Service. That burden manifests itself not only in the need to deliver care but in an ever increasing proportion of the population needing to deliver those services rather than being economically active in other parts of the economy. But all this requires a holistic strategy to be delivered somewhere in government that brings the elements of government together and, most importantly, ensures that elements attending the delivery of healthcare reflect the complexity of managing health in an ageing population and the need to ensure that those challenges are addressed appropriately for individuals, as well as across communities and more broadly in the system. We need substantial government investment to ensure that the move to prevention is properly financed now, rather than being talked about as a future requirement.
Lord Sikka (Lab)
My Lords, ageing problems begin during childhood and are incubated by poor government policies. A June 2026 paper in Nature Human Behaviour noted that consequences of poverty, inequality and discrimination accelerate biological ageing from a very young age. Adults enduring childhood economic deprivation age at a significantly accelerated biological pace, even if they achieve financial security in later life. Many need support. Austerity, real wage and benefit cuts, and degradation of the NHS deprive people of nutritious food, good housing, healthcare and possibilities of working until a later age. A regressive tax system prevents the poor saving for old age. The poorest 20% pay a higher proportion of income in direct and indirect taxes than the richest 20%. The income tax personal allowance has been frozen at £12,570 since 2021. If it had increased in line with inflation, it would now be £16,070. As a result, someone earning just £17,000 this year will be paying £1,000 more in income tax and national insurance. Some 39% of adults in the UK have savings of less than £1,000. Millions simply cannot save for old age. Premature biological ageing prevents people working until a later age. Some 7.27 million hospital appointments are awaited, fuelling a rise in chronic illness and disabilities. The average healthy life expectancy has declined to 60.7 years for males and 60.9 years for females. In parts of Blackpool, it is 50.9 years for males and 51.2 years for females. In parts of Scotland, it is 44.8 years for males and 44.2 years for females. It is hard to know how we are going to get people aged around 50 to work. Calls for educating younger people about the financial cost of retirement will bear little fruit. In a society where 1% have more wealth than 70% of the population combined, pushing pensioners into poverty is not the answer: it will simply lead to a form of economic euthanasia. The ageing problems are nurtured by inequitable distribution of wealth, poor housing and healthcare, and regressive taxation. Government must rise to the challenge.
Baroness Penn (Con)
My Lords, I am grateful to the Economic Affairs Committee for this report. It reminds us that an ageing society is not simply about older people, it is about how we structure our whole lives and how that may need to change in future. I will touch on two points; the first is pensions, where I welcome the work of the Pensions Commission. While we await its final report, there are three issues on which I would welcome the Government’s thoughts. The first issue is how we build a stronger culture of investment more broadly. For most people, pensions are their main exposure to the stock market, and outside that, too many people still default to cash saving, missing out on longer-term growth. The second is the gender pensions gap. Among 55 to 59 year-olds, the commission finds a 48% gap in private pension wealth. This is not primarily because women contribute less when they are saving into a pension, but because they are more likely to work part time, earn less and take time out for caring. So how are the Government considering pensions alongside women’s labour market participation? The third issue is public service pensions, which are firmly beyond the commission’s remit. The committee heard evidence about pension cliff edges discouraging people from potentially working longer. More broadly, we need to ask ourselves whether we have the balance right across the whole life course, particularly when people in their 20s, 30s and 40s face pressures to buy a home or pay for childcare, while some pension schemes provide a substantially greater amount of security in retirement. Do the Government have a clear assessment of the affordability of these pension schemes and the incentives they create? The second area I will touch on is fertility, where I agree with the noble Baroness opposite: we should not treat this as a lost cause. Looking at the evidence to the committee and beyond, I am not advocating for one-off incentives or baby bonuses, for which the evidence is weak, but there is evidence to say that fertility responds to economic confidence. UK fertility rates rose through the 2000s, before falling off after the financial crisis and never recovering. Growth must be part of the answer, but that is beyond a three-minute speech. However, research by Dad Shift and Movember found that 57% of fathers say that financial insecurity after their first child holds them back from having more. Eligibility for paternity leave and the levels of pay in the UK are almost uniquely low compared with other developed economies. I ask the Minister what the Government’s approach is under this Prime Minister to the review of parental leave, due to conclude by the end of the year. Even if the Government do not think that it would impact fertility, there is strong evidence to show that better leave for dads increases mothers’ and overall labour market participation. That matters doubly in an ageing society for strengthening workforce participation now and helping to close the gender pay gap in future. These issues are related and I hope the Government will treat them as such.
Lord Macpherson of Earl’s Court (CB)
My Lords, I congratulate the committee on some first-rate analysis. An ageing population has been long foreseen and long debated. Very occasionally, Governments have taken action. I recall working on the reforms to SERPS introduced by my noble friend Lord Fowler in the 1980s. But for the most part, Governments have preferred to shelve decisions on the many reports they have commissioned. The result is that the cost of ageing is rising inexorably. The OBR estimates that age-related spending will rise from 26% of national income to some 35% in 2075. We can fantasise about financing these pressures through spending cuts elsewhere, but even if we abolished all expenditure on working-age and children’s benefits, that would relieve only half the pressure from age-related spending. Demographic pressures are already resulting in cuts. To pay for the ever-increasing proportion of spending accounted for by pensions and the NHS, successive Governments have had to cut “unprotected programmes” such as prisons, police and local government. The report describes the failure to solve “the social care crisis” as a scandal. But if those unlucky enough to require paid care are not going to pay for it, somebody else is—and that means the taxpayer. We need to face up to this fact. I have long argued the case for a health and social care levy. Everybody should pay it, young and old alike, and it should be payable on dividends and rents as well as earnings. For all of six months, thanks to Messrs Johnson and Sunak, I got my wish. Sadly, its abolition was the one tax cut which survived the Kwarteng-Truss Budget of 2022. At some point, it is going to have to be reinstituted, but raising taxes has its limits. The triple lock will have to go. At the very least, the state pension should rise no faster than the post-tax earnings of those in work, and we will have to take another look at the winter fuel payment and universal benefits such as free travel. Support for pensioners needs to be targeted at those who need it most. A rising proportion of the elderly is relatively affluent; more than 1 million pensioners pay the higher rate of income tax. Conceivably, higher growth may yet come to our rescue—though I rather doubt it. I was encouraged by the new Minister’s remarks on economic strategy on Tuesday. I wish him well in solving these problems, which have proven intractable for too long.
Baroness McGregor-Smith (Non-Afl)
My Lords, I congratulate the Economic Affairs Committee on its excellent report. One passage particularly struck me: paragraph 40, where, in discussing the implications of an ageing society, Richard Hughes of the OBR highlighted the pressures that demographic change will place on the public finances. Those pressures are real, and they cannot be ignored. Yet I am concerned when older people are viewed principally through the lens of cost and dependency. Too often, the debate focuses on what older people will require rather than what they can continue to contribute. Older people are workers, carers, volunteers, mentors, entrepreneurs and taxpayers. Their contribution to our economy and our communities is immense. We should therefore view an ageing society not simply as a challenge to be managed, but as an opportunity to be embraced. Having spent all my career in UK and global businesses, I have seen at first hand that experienced employees bring great experience, judgments and resilience. Too many people, however, leave the workforce—not because they wish to, but because poor health, caring responsibilities or inflexible employment practices make it difficult for them to remain. I have three requests to make today to support businesses and business growth. First, on healthier lives, we should shift more resources from treating ill health to preventing it. We need a national focus on healthy life expectancy, with prevention, physical activity, including strength training, and healthier ageing recognised as investments that reduce future pressure on both the NHS and the public finances. Secondly, on skills, we need to support a genuinely lifelong approach to learning. Apprenticeships, retraining and digital skills should be accessible throughout anyone’s full and longer working life. The apprenticeship levy should be fundamentally reviewed to ensure it is sufficiently flexible for an economy being transformed by AI and longer careers. We should remember that the apprenticeship levy was devised well before we even discussed generative and agentic AI. Thirdly, on employment, we should make increasing employment among older workers a clear economic priority. Greater flexibility, phased retirement and stronger occupational health provision would enable more people to remain economically active for longer. Let us not forget: 40% of our construction workers will be retiring in the next decade. If we are serious about building homes and infrastructure, we really will need more. The most sustainable response to an ageing society is to improve healthy life expectancy, strengthen productivity and enable more people to remain active contributors for longer. This will reduce the pressure on our public finances and support business growth. I welcome this report and look forward to the Government’s response.
Lord Willetts (Con)
My Lords, a strong theme in this excellent report is the importance of people aged over 50 remaining in the workforce—the other NEETs—and the challenge in the report is clear. Perhaps I can make the Minister one specific Budget representation on this issue. At the moment, people with pension savings can access them without losing any tax reliefs from the age of 55. The Government are already planning to increase that to the age of 57. The report makes a strong case for increasing that age to 60. Will the Minister consider that option? Secondly, as we make progress on improving participation in the workforce, the issue of the pension age comes up. It is striking that, from April of this year, the pension age started increasing from 66 to 67 with no fuss and no dispute. Beyond that, there is an option of increasing the pension age to 68. The Government commissioned their obligatory review of the pension age from Suzy Morrissey. They have had that report for several months. It is absurd that we in this Chamber are discussing this issue and the Government have still not published that report. Can the Minister give the House an assurance that it will be published urgently, so it can inform debates such as the one we are currently having? Finally, and very briefly, as this is a report about long-term trends, I was surprised that there was no reference to the most significant long-term technological trends—notably, the developments in robotics. It is striking that, when you look around the world, the countries facing the most significant demographic crises—Japan, Korea, China and Italy—are also the world leaders in robotics. This is part of their strategy. I declare an interest as chairing the Regulatory Innovation Office, the government body that looks at regulatory barriers to new technologies. But you do not need to read dry reports on the issue. I strongly recommend the BBC series “Ann Droid”, which identifies one possible scenario which could be in existence by the dates which this report discusses. I personally do not think we are likely to have one single humanoid robot doing everything, but I can absolutely envisage robots interacting with lonely older people, with indefinite time to give to their attention, and assisting with physical social care. I urge that the Minister also incorporates technological possibilities in any considerations of ageing societies.
Lord Best (CB)
My Lords, my comments on this excellent report concern a missing ingredient and omission from it: the role played by housing policies in preparation for demographic change. I am not seeking to make the case for private and public investment in more manageable, accessible, right-sizer accommodation that enhances health and well-being, saves NHS and social care budgets and releases family homes for the next generation; that job has been done so well by the Older People’s Housing Taskforce of 2024. I am referring to what we choose to do about housing policy today, which has profound economic implications for both helping pay for our long lives for some and, conversely, adding appreciably to the cost of our long lives for others. Some 75% of pensioners are home owners. Most pensioners will have paid off their mortgage. Their incomes in older age go much further, because they are not having to spend a large proportion of their income paying the rent. Most have accumulated a tax-free capital gain. Today’s pensioner owner-occupiers hold approximately £3 trillion in housing equity. This accumulation of significant resources has implications for the debate on paying for care costs and the current review by the noble Baroness, Lady Casey. However, for pensioners in the private rented sector, and particularly for retirees of pre-pension age in the private rented sector, there is serious trouble ahead. Here, rents that start out at one-third or so of earned income will absorb a much higher proportion of post- retirement income. In many cases, the impact of the increasing rent is likely to trigger an eligibility for housing benefit. The IFS estimates that the already massive housing benefit bill, currently around £38 billion per annum, will rise dramatically as a result of the switch from younger people buying to private renting. Home ownership is down from 71% to 65%. The prediction is that the housing benefit bill will rise to over £70 billion in the years ahead, much of the increase necessary to support the PRS pensioners. It is housing tenure, beneficial for homeowners but highly problematic for private sector tenants, that will make a massive difference to the wealth and living standards of older people and the cost of an ageing population to society at large. I strongly recommend another inquiry by our excellent Economic Affairs Committee to cover this.
Baroness Coffey (Con)
My Lords, one of the challenges of speaking so late in the debate is that many brilliant points that you thought you might cover have already been made, and the noble Lord, Lord Best, just made one of them. It is one of my biggest concerns about the increasing costs and one reason I kept trying to encourage the Government to abandon their ideology about not being able to buy your own home from housing associations or councils. We are reaching the tipping point, where costs are going to rise significantly as we see less home ownership. I appointed my noble friend Lady Neville-Rolfe to do the previous report looking into pension age. We have to reach some kind of consensus on what is an acceptable proportion of pension income compared to earnings to reach a proper settled way that we can take forward. It was the 2007 Act, brought in by the then Labour Government and enacted by the coalition Government in 2011, that reinstated the link to earnings. We have a variety of views on what the ideal pinch point should be. That is the sort of thing that I hope the Pensions Commission will settle. Sometimes, the triple lock gets blamed for a lot of things. To some extent, I would prefer some kind of double lock. At the time, the 2.5% probably seemed right to achieve the policy outcome of getting pensions as a proportion of earnings up more quickly. It has achieved that, by and large. As a consequence, however, it has been used about four times—though only twice in an artificially high way—compared to some of the other changes on earnings and inflation. Indeed, I was the Cabinet Minister at the time, and we took the proactive decision on two occasions: one was when the earnings link legislation would have frozen the state pension. We changed that for a year. We also changed the earnings link, removing it for a year. That, just in one year, saved £4.5 billion, and about £30 billion over the next five years. It shows that some quite modest changes can have significant benefits to the public finance. The other element of this very interesting report that I thought was useful was thinking about working. The best employers are a lot more flexible. I want to encourage the Government to think again, as they bring forward their regulations and guidance, about what they are doing. We removed the default retirement age. Again, this was designed to make life more flexible for people. The other key element—I saw it with my late mother—is that Covid had a massive impact on old people, as they just did not get moving. I saw her muscles atrophy. We need a proactive occupational health service, and I would welcome health visitors for pensioners, not just for children.
Baroness Thornton (Lab)
My Lords, earlier this week, I was pondering on which aspect of this most impressive report on ageing I might usefully make a small contribution. As a relatively new chair of the SCIE—the Social Care Institute for Excellence—it seemed important to make the links between the new enthusiasm from our new Prime Minister for the reform of social care and this debate. The reform of social care is a much wider issue than just social care, because it deals with young people, disabled people, those with learning and mental health challenges and so on. The interface between health and social care is undoubtedly a facet of this debate. However, lo and behold, the BBC—bless it—and its radio programme “Radical” gave me an answer, featuring, as it did, Professor Sarah Harper, professor of gerontology at Oxford. She was a witness and contributor to the considerations of this report. Like my noble friend Lord Reid and the right reverend Prelate the Bishop of Coventry, she challenged the widespread belief that ageing populations are primarily a social and economic burden, arguing instead that longer lives represent one of humanity’s greatest achievements and an opportunity to rethink how society is organised. As the report does, she explains why many of the pressures associated with ageing societies stem from institutions designed for a different era—it is obvious. She argued that our welfare systems, labour markets and expectations around retirement no longer reflect the realities of modern life, where people are often living longer and healthier lives—more so than previous generations. That is a note of optimism, and that is what we need to inject into the debate. In fact, many of the contributions did exactly that. The Government need to grasp this, run with it and bring forward a much bigger strategy, and this needs to be done in the face of optimism for our society and its future. Look around this House, and look at the age profile that we have here. We are an excellent example and, of course, we are greatly privileged. There is no doubt about that, and I greatly support it. I think about my noble friend Lord Dubs at 93. He is still here, leading great things in this House. We need to see this as an opportunity to build a richer society that takes into account the things in the report to do with the economy, health and social care, and the changes that are necessary. In particular, it is about the culture and how we regard older people and the value we place on them. I look at this report as the start of an optimistic debate, which I hope will lead to greater things.
Baroness Meyer (Con)
My Lords, people aged over 85 are the fastest-growing population segment, but we are also having far fewer children. This is a problem, as the excellent report highlighted. The committee doubts that financial incentives can reverse falls in fertility. I do not entirely agree. Since the 1950s, successive French Governments developed a strong, pro-family system, with tax advantages and practical benefits aimed at larger families. It worked: France had the highest fertility rate in western Europe. Today, France has not escaped the recent decline, but its fertility remains higher than ours, at 1.56 per woman. The Government can create an environment in which it is easier for people to have more children. Higher taxes, housing and childcare costs have made it harder to start a family, just when fertility drastically declines with age. The Centre for Social Justice estimates that 3 million women may remain childless. It calls them Britain’s “missing mothers”. Not wanting children is a choice; wanting them, but being unable to afford them, is a problem. There is another worrying statistic. In 2023, almost one in three conceptions ended in abortion—the highest proportion on record. Yet the Government recently removed women from the criminal law relating to their own abortions at any stage of gestation. Then there is the other problem, addressed by many noble Lords, of intergenerational fairness. Immigration is not the answer. As Professor Andrew Scott told the committee, “immigration may buy you time”, but it does not solve the fundamental problem. Immigrants grow older, too. Instead of all this, we need a fundamental change in our attitude towards ageing. Retirement should not be seen as the finishing line. We should encourage people to remain active, engaged and useful for longer. As we said before, look at this Chamber. Many Members are well beyond conventional retirement age. That is a perfect example, and we should stop treating older people as a cost and recognise them as an underused resource. This week, 84 year-old actor Peter Marinker, recently diagnosed with Alzheimer’s, is performing Samuel Beckett’s “Krapp’s Last Tape” alone on the London stage. What better example could there be? What steps will the Government take to change our attitude towards older people, and will they consider reducing taxes and improving housing and family policies to make it easier for people to have children?
Baroness Prashar (CB)
My Lords, I commend the Economic Affairs Committee for producing this report and thank the noble Lord, Lord Liddle, for his comprehensive introduction. The committee has offered a sobering assessment of our inadequate preparedness for an ageing society, and I fully endorse the recommendations of the report, particularly the emphasis on supporting those in their mid-50s and 60s to remain in work or return to work, as well as its call to address the crisis of adult social care. It is, however, regrettable that the Government’s response does not grasp the strategic direction recommended in the report, nor the committee’s call to “act now”. I declare my interest as an ambassador for the Age Irrelevance campaign, which was built on the vision of the late Baroness Greengross, a lifelong campaigner for age inclusion. The campaign’s push for the inclusive language of “era of longevity” as opposed to an “ageing society” captures the need for a holistic approach and the pressing need for younger generations to invest in their own longevity, from both a financial and a health aspect. If we are to move from the idea that an ageing society is a burden that will deplete resources, we need to look it at as a multistage life. We need to move away from the narrative which creates intergenerational division and resentment to one which is designed to create systems that allow people to contribute to society in different ways and at different stages of their life. To achieve that, we need an integrated approach with a positive narrative that shows determination to benefit from the demographic shift and maximise the opportunities it offers. If the pension imperative is that people must work longer, this can be achieved only if it is supported by a national housing strategy, mentioned by the noble Lord, Lord Best, which supports rightsizing near places of work, enabled by progressive models to promote work and healthy, longer lives. Longer working lives can be achieved only if they are underpinned by a focus on healthy living, healthy ageing, prevention, and understanding of healthy living and healthy lifestyles from early stages. In preparing for longer lives, financial planning should be mandated in the education curriculum, and we need employers to actively support longer careers and changing working patterns. The Government should also place lifelong learning at the heart of education and, of course, continue to ensure digital inclusion and the use of innovative technology to achieve this. Urgent engagement with the issues raised in the report is very important, and I look forward to an encouraging response from the Minister.
Lord Razzall (LD)
My Lords, I join other noble Lords on the committee in thanking our recently departed chair, the noble Lord, Lord Wood, who was an excellent chair, as we have all agreed. I have only one tiny criticism about his chairmanship and his drafting of this report, and I speak as the one of the tenders of the Asquithian flame on these Benches. If you look at the report closely, it says that in 1909, when the old age pensions were introduced, they were introduced by Lloyd George as Prime Minister. They were not; they were introduced by Lloyd George as Chancellor of the Exchequer and Asquith was Prime Minister, so I want to get that on the record. Many people may have thought that we chose to do a report on the ageing society because the majority of the members of the committee were over 80 when we decided to do this. I have to say that that was not the case. We chose to do it because, as a number of noble Lords have indicated—certainly the noble Lord, Lord Liddle, did in his wonderful opening speech—this is a serious issue facing our country. One thing that nobody, apart from the noble Baroness, Lady Bottomley, touched on is that we are not the only country facing these issues. To take three of them, Italy is the worst—or best, whichever way you look at it—country in Europe for these problems, probably because, as a well-known Roman Catholic country, it has the lowest rate of fertility. Further away, Japan has a massive problem which will result in the reduction of the population of Japan. The best view about what has happened to Japan is that it is because it has had no immigration, as a result of which its population is shrinking. Then, of course, the obvious country with a problem is China, because that is what happens if you have a one-child policy—it comes back to bite you in future years. Our committee was extremely strong on what we do not believe the solutions are. First, on fertility, as the noble Lord, Lord Liddle, indicated, we did not believe that doing anything about fertility would be enough to solve the problem. I know that the noble Baroness, Lady Nargund, had some solutions, and I know that the noble Baroness, Lady Meyer, disagreed, but we were not saying that doing something about fertility would not have some impact, we were saying that doing anything about it would not have an impact in the timeframe to solve the problem. The second thing that we thought would not solve the problem is immigration. As the noble Lords, Lord Liddle and Lord Turnbull, indicated, whatever we do about immigration, we do not believe that that would have an opportunity in the timeframe to do anything about it. Thirdly, we do not think that what appears to be the Government’s approach, which is, “If only we did something about productivity, that would solve the problem”, is correct. Despite endless government attempts to do something about productivity over the last 14 to 16 years, there does not seem to be any evidence that we have done anything about it. So we do not believe that that will solve the problem. As far as pensions are concerned, we did look at them, and we certainly looked at the question of an increase in the starting pension age. As the noble Lords, Lord Liddle and Lord Reid, and the noble Baroness, Lady Wolf, indicated, we again thought that it was too late to have a massive impact by increasing the state pension age. The noble Lords, Lord Redwood and Lord Willetts, probably disagree, but that was our conclusion. As readers of the report will see, we did not look at the triple lock. This debate probably indicates why we did not do so, because it is clearly a highly controversial topic. On the one hand, we had the noble Lords, Lord Reid, Lord Turnbull, Lord Tugendhat and Lord Macpherson, and the noble Baroness, Lady Bottomley, all indicating that they thought keeping the triple lock was silly, while on the other hand we had the noble Lord, Lord Redwood, indicating quite the opposite point of view, and I think the noble Lord, Lord Davies of Brixton, thinks we certainly should not do anything about it without a proper debate. For that reason, we rather wisely kept off in the report the issue of the triple lock. As noble Lords will realise, we believe that the magic bullet, to the extent that there is one, is to do something about getting people aged between 50 and 65 either to stay in work or back into work. As a number of noble Lords have indicated, there are a number of reasons why they leave work. The noble Lords, Lord Liddle, Lord Lamont and Lord Tugendhat, all indicated that people do not work because they have caring responsibilities. The noble Lord, Lord Liddle, was the only person to say what I think is very often the case: actually, they have made enough money so that they do not have to work. That has an impact on our society. People such as the noble Lord, Lord Tugendhat, and the noble Baroness, Lady Bottomley, have also made the obvious point that there are often health concerns. The noble Baroness had some interesting suggestions as to what might be done to help that. The noble Lord, Lord Liddle, also drew attention to the fact that it is not only what is happening at the top end but what is happening at the bottom end that is relevant. As the Milburn report indicated, unless we do something to bring young people back into the workplace we will not help to provide the revenue necessary to support the elderly. I, and the committee, agree that requires action. Finally, as the noble Lords, Lord Liddle and Lord Davies of Brixton, both articulated, the government response to our report is at best disappointing and at worst very disappointing. I hope that the Minister can do a bit better in reply.
Baroness Neville-Rolfe (Con)
My Lords, this is a valuable and timely report. It continues the tradition of high-quality reports from the Economic Affairs Committee, and I join the tributes to the noble Lord, Lord Wood of Anfield, in his role as chair, to the noble Lord, Lord Liddle, for his clear and compelling opening speech, and indeed to the clerks who have supported the committee. This excellent report sets out with clarity the scale of the demographic challenge facing the country. The UK is ageing rapidly, birth rates have fallen to historic lows and the implications for our labour market, our tax base and our public finances are profound. The noble Lord, Lord Liddle, and my noble friend Lord Lamont were right to emphasise the consequences for fiscal sustainability and to cite the OBR in telling us that, on current forecasts, debt would rise to an unimaginable 270%. My noble friend Lord Willetts emphasised the possibilities of technology and robotics in heading this off, and many noble Lords have rightly focused on the need to increase employment rates among those in their 50s and 60s. That is a theme I will return to later. We also heard from many about the need for transformation of adult care; I think we all wish the noble Baroness, Lady Casey, great success. There has been a debate about pensions, summarised by the noble Lord, Lord Razzall, and articulated very well by my noble friend Lady Coffey from her experience at DWP. There was a lack of agreement, but the arguments for the triple lock were set out very clearly and well by my noble friend Lord Redwood. I thought my noble friend Lady Bottomley was right to mention the value of occupational health, which is something I agree with from my business experience. It is possible, in the time available, to cover only a few points. I will try not to repeat what has already been said, but I draw attention to the Government’s response. Unlike the noble Lord, Lord Razzall, I think it is a respectable one, although sometimes ideology is overinfluential. At the top of page 12, the commitment to “halving the gap in healthy life expectancy between the richest and poorest” is foolish. The Government’s ambition should be to improve healthy life expectancy for everyone, especially the least fortunate. We do not want the gap to be narrowed simply by reducing healthy life expectancy among the rich. It is clear from the report that the problems of our ageing society would be much reduced if we could get our birth rate back up to the replacement rate. Although all countries have found this difficult, more efforts should be made. It is not a lost cause, as my noble friend Lady Penn explained. My view is that more help with nursery provision could make a big difference. Having a childcare system largely geared to school hours and school terms may be convenient to teachers, but it makes it very difficult for most working parents. They do it better elsewhere, not only in Scandinavia but in the United States and, indeed, in France, as described by my noble friend Lady Meyer. I know that from the experience of family members in those countries. The noble Baroness, Lady Nargund, explained that people also need to be taught more about fertility. Of course, the shift to starting families later can lead to lower replacement rates. Otherwise, the best way to mitigate the problems outlined in this important report is to conjure up more economic growth. The then Chief Secretary to the Treasury, James Murray, described this in his response letter as the “central mission” of the Government. It is one of the best ways out of the dilemmas described and, indeed, many of the other problems we face. Unfortunately, many of the actions taken by this Government have reduced growth. Examples include the effective ban on new drilling in the North Sea, leaving Norway to grow instead. That and other policies have led to the highest electricity prices in the developed world. These have ruined our car and cement industries and hit data centres which support AI, one of the key new avenues of growth. We have seen a disastrous attack on large and small businesses: a £25 billion hit on NICs, a very high minimum wage, especially for the young, and the Employment Rights Act, the damaging consequences of which become more apparent by the day. I urge the Government not to launch another attack on wealth creators in the Budget on 28 October. Improving productivity can also contribute. It was rightly on the list from the noble Lord, Lord Razzall. I am more optimistic than he is about the scope for improving productivity if we follow the right policies. Demography is not only about births and deaths—or, indeed, immigration. We face a worrying trend of entrepreneurs and younger talent emigrating because of high taxation and growing burdens on business. If we want people to work longer, to invest more and to innovate here in Britain, we must stop making it harder for them to do so. I ask the Minister for reassurance: how do the Government intend to reverse the outflow of skilled, ambitious workers, who are essential to sustaining our future tax base and supporting our ageing population? We also need a national conversation about retirement expectations. Too many assume that the system will simply provide. Yet, given the demographic realities, younger workers will need to save more for longer and will almost certainly retire later. There are two mitigations in the report that I will highlight in conclusion. The first is to join others in persuading those able to do so to work for longer and allowing them to do that. People live much longer than they did, but a much smaller part of their life is spent in work than when pensions were devised. It is too easy for many of those contributing to the economy to retire early. My father’s farming business failed when he was in his 40s, but he retrained and worked into his 70s. We need more of this, and not only in the House of Lords. To achieve this, we need to call out the culture of age discrimination that I was shocked to discover when preparing my review of the state pension age in 2022. The latest figure from the Centre for Ageing Better suggests that one in three people reports experiencing age discrimination. The right reverend Prelate the Bishop of Coventry rightly described the amazing contribution that older people make to civil society. My second issue is better financial education. It is welcome news that the Government will shortly consult on better provision in the national curriculum. On page 6, the response commendably tells us that, through their reforms, the Government will be “building a generation better equipped to plan for and navigate significant financial decisions, such as those relating to retirement”; obviously, I would add to that investment, which has been a subject of this debate. The response talks about young people learning “about tax, scams, bank accounts, savings and pensions”, to which I would add the power of compound interest when you save. I would also point to the value and importance of financial literacy across the population and in lifelong learning, which is the subject of amendments I have proposed to the financial services Bill. In conclusion, I warmly thank the committee for all it has done in setting the scene in this vital area. I thank the noble Lord, Lord Liddle, all of the committee’s members and all those who have taken part so constructively today. They will, I hope, help the Minister move things forward, and I very much look forward to his response.
The Parliamentary Secretary, HM Treasury (Lord Pitt-Watson) (Lab)
My Lords, I begin by echoing the welcome of the noble Baroness, Lady Neville-Rolfe, and others for the report. I congratulate the noble Lords, Lord Liddle and Lord Wood of Anfield, on bringing it to the House today. I thank all noble Lords who have contributed to what has been a thoughtful and wide-ranging debate. As a new boy, I am struck by how coming to a debate in the House of Lords always opens up new issues around things you thought you had studied. I will aim to address the points that have been made—although I may not be able to namecheck everyone—and the excellent speeches made by noble Lords, such as that from the noble Baroness, Lady Prashar, which were very broad in terms of thinking about how to deal with this issue. I begin where many noble Lords—in particular, the noble Lord, Lord Burns—began: with some optimism. The fact that we, as a society, are living longer is one of the great achievements of the modern age. I have two little twin granddaughters, Grace and Astrid. The noble Lord, Lord Liddle, explained to me that they can expect a lifespan of 90 years, which is an absolute triumph of public health, medical science and rising living standards. People having longer, healthier and more fulfilling lives has been an objective of everybody and of every party, I think—one that we want to promote. This Government remain committed to that goal. However, that brings with it new and mounting pressures on public services and public finances not just here but, as the noble Baroness, Lady Bottomley, and the noble Lord, Lord Razzall, pointed out, in lots of countries across the developed world. The Government do not shy away from the reality, which is that addressing this challenge is not straightforward. It is not just about addressing the pension age, although that is an important part of what we have to do, or addressing fertility. I was interested in the speech from the noble Baroness, Lady Nargund. I had not thought about that issue before, so I would be more than pleased to talk to her about it or arrange for her to talk to somebody in the Government with greater expertise on it than me. The noble Baronesses, Lady Penn and Lady Meyer, also talked about this issue. As I say, though, this is not just about the pension age or fertility. An ageing society touches on nearly every area of public policy. It would be wrong of me to suggest that there is one lever that can resolve it alone, however important it may be; that was, I think, the key point in the committee’s report. In order for this to work, we need to think also about how we can keep people, particularly older people, in work for longer and how we can deal with caring and social care. There is a circularity here, because the people who are not working are often looking after their parents. We need to think about how we can address discrimination and about life planning from education, which was mentioned by the noble Baroness, Lady Neville-Rolfe, as well as keeping people in employment. I wish to talk about some of those points and the Government’s approach. I will not touch on housing, which I know is important and was raised by the noble Lord, Lord Best, or technology, which was raised by the noble Lord, Lord Willetts. I would like to talk about how we can look after people in old age. How can we support them to keep working? How can we provide adequate pensions? More broadly, how can we promote prosperity and keep the dependency ratio down by focusing on the denominator? I shall start with social care, about which many noble Lords—including the noble Lords, Lord Burns, Lord Lamont and Lord Liddle—talked. There is a big gap in welfare provision. People are seeing everything they have worked for be wiped out by the costs of social care, which are increasing hugely. This issue was raised by the noble Baronesses, Lady Thornton and Lady McGregor-Smith, the noble Lord, Lord Willetts, and the right reverend Prelate the Bishop of Coventry. We must think about the technical solutions and not forget that old people, like all people, are of immeasurable worth. Our Prime Minister has set out his personal commitments to making progress on fixing our broken social care system. He has agreed with the noble Baroness, Lady Casey, to bring the conclusion of the independent commission forward to 2027 in order to help with that. This will combine the work that was originally set out as two separate phases, so that a single set of recommendations will cover both the immediate improvements, which the system needs now, and the longer-term transformations that are required to meet demographic changes. The same pressures are bearing down on the National Health Service, and a series of actions is taking place there. That is all from me on social care. What about keeping people working? I must start by addressing ill health. The noble Lord, Lord Kakkar, introduced fantastic expertise to this debate. Last year, the Government set out a 10-year health plan. They remain committed to supporting people to lead healthier lives. In the 2025 Budget, there was an increase of £29 billion in annual cash resources by 2028-29. The Department of Health and Social Care is bringing £13.4 billion of public health funding into the public health grant, and £800 million is being put into the treatment of mental health. I know that I am quoting inputs rather than outputs, because we do not know what the outputs will be, but I feel that there is a commitment to try to address these issues. I turn to pensions. We have had a big debate about the triple lock, and I thank the noble Lords, Lord Redwood and Lord Turnbull, and the noble Baroness, Lady Coffey, for their input on that. As noble Lords know, the Government made a manifesto commitment that, until the end of this Parliament, the triple lock will remain. The noble Lord, Lord Tugendhat, made an interesting suggestion about a cost-benefit analysis, and the noble Lord, Lord Willetts, asked what the retirement age will be. That has been delayed because of the Pensions Commission. Last summer, it was announced that the Government had launched a Pensions Commission to review the state pension age. The pension age review feeds into the Pensions Commission, which will advise the Government early next year on how the state pension age and wider pensions policy framework should adapt to trends to ensure that pensioners have adequate incomes in future, while ensuring fairness and fiscal sustainability. The danger is that this feels like just another grand review. The noble Baroness, Lady Penn, and the noble Lord, Lord Macpherson, raised that. I have a long paragraph on all the things that are happening in pensions right now. Many foundation stones are being put in place: mandating value-for-money reporting; trustees giving people guidance on how to get a pension out of their pension savings; and CDC collective pensions that will give people an income for life rather than cash. Lots of stuff is already going on. There is also, as the noble Baroness, Lady Neville-Rolfe, said, financial education for the young so that they know what is going on as well. I am running out of time. Noble Lords will be aware of many of the things that the Government are doing on the economy. It is growth in every postcode, which I hope addresses the point raised by my noble friend Lord Sikka. The noble Baroness, Lady Neville-Rolfe, is right to hold us to account. This is not procrustean. We are looking after everyone in every postcode. Let me skip forward, if I may. A lot is going on with young people. We have talked about education. There is the youth guarantee, the growth skills levy and investing in training. More broadly, the Government recognise the importance of ensuring that every young person can make a successful transition to work. That is what Sir Alan Milburn’s review will be doing. Given that this is such a cross-cutting challenge, consideration of how we tackle the ageing population is embedded everywhere—in growth, pensions, health and social care and labour markets. It is also embedded in housing. We are not following one of the recommendations of the committee with a grand plan. My noble friend Lord Davies recognised this. However, the Government recognise that this is a big challenge. An ageing society is a symptom of success. It is a matter for celebration. It is a result of the determination of a great nation to improve living standards for everyone. We have not solved all the problems—and I have not addressed them all in this speech. However, we have some strong foundations, not least in your Lordships’ report keeping an active debate going and in action by the Government. I trust that Grace and Astrid can not only expect longer lives than their granddad but healthier and more fulfilling ones. Thank you.
Lord Liddle (Lab)
My Lords, I thank all noble Lords who have contributed to this debate, which has thrown up an enormous range of new ideas and thoughts that various committees of the House might take up. I was going to discuss with our clerk how we can summarise all the issues that might be taken up further. I congratulate my noble friend Lord Pitt-Watson on his summing-up. It is very difficult when you are a new Minister to do this, but he did very well, so I thank him. I feel a little guilty that the report did not directly address the triple lock question. It is obvious that that question must be addressed. My own sympathies are very much with taking the risk of doing it in an appropriate way. We did not do that because we wanted to draw attention to a fundamental problem of this declining participation rate among over-50s. A lot of ideas have come forward on how we could address this question. Therefore, the report and the debate on it have been extremely valuable. I thank everyone most sincerely for the part that they played.
Motion agreed.
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Source: UK Parliament Hansard API. Debate ID: 5398567.