An ageing population

Sat, Oct 27, 2012, 01:00

PEOPLE ARE living longer, thanks to improvements in healthcare and changes in lifestyle, and in the developed world they are having fewer children. This combination of increased longevity and lower fertility in rich countries has produced a major demographic change: an ageing population where fewer people in the workplace must – with their taxes – support more people in retirement. Ireland is no exception to this trend.

A report by the Centre for Ageing Research and Development in Ireland suggests that governments, North and South, face a formidable challenge in providing adequate care for the elderly. In the next decade an additional 45,000 older people will test the ability of state services in both parts of Ireland to cater for their needs, whether for long-term residential care or for home help support.

The demands and costs of an ageing population also present a major problem for both public and private finances at a difficult time. Fewer people at work means, most likely, a slower rate of economic growth as the labour force declines. Life expectancy has doubled since the 19th century. But that longer average lifespan has, in turn, increased pressure on pension funds, and forced governments to raise the age of retirement. In Ireland, retirement age will rise to 66 in 2014, and to 68 in 2028.

Changed economic circumstances mean those at work now need to save more for their retirement years, given concerns about the sustainability of current levels of pension provision, whether private or public. Most private (defined benefit) pension funds are in substantial deficit and the State pension has not been increased for some years. Governments everywhere – not just in Ireland – are finding that their healthcare and pension promises have become less and less affordable, and further adjustments are required.

Against that bleak economic background and outlook, the challenge to provide proper care for the elderly remains a daunting one. The choices, as Professor Charles Normand leader of the research project has pointed out, are stark. He has warned that unless adequate care in the community and residential care policies are developed, then” the pressures on the acute hospital system will be unsustainable”. Northern Ireland has advanced further and faster than the Republic in the general provision of services for the elderly. Nevertheless the cost of care for older people in the South has risen from €1 billion in 2006 to €1.6 billion last year, and with demand increasing this figure is set to rise significantly in the years ahead.

At present, the policy emphasis has favoured the provision of care in the home or community for as long as possible. In future, the report suggests that long-term care should support independent living in the home, with quality residential care when required. With the number of older people aged over 65 projected to rise from 12 per cent of the population to some 15 per cent within a decade, the cost of care provision will continue to rise. That makes it all the more important to ensure a sustainable system of long- term care is quickly put in place.

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