Spending money on old age now will save us money in time
The UK's population is getting older and that means that the cost of providing pensions and old age benefits is increasing and is set to hit 8.5% of GDP by 2060. The government is doing what it can to try and reduce this cost by overhauling the state pension system and linking the state pension age to longevity which means it will rise faster.
These are ways of spending less money, but do we need to speculate to eventually accumulate when it comes to how public money is spent. We don't need to spend more on pensions and free bus passes, money needs to be spent on better healthcare and helping people stay in work longer.
If we speculated (spent more) on keeping people fitter for longer they would retire later so could build up their pension pots for longer and continue paying work-related taxes – the coffers would receive a double boost.
A Fiscal Sustainability Report by the Office of Budget Responsibility said 'unsustainable' pressure would be placed on public finances by our ageing population if £19 billion of spending cuts or tax increases were not made.
It seems like a terrifying amount of cuts and/ or taxes especially when £153 billion of austerity measures have already been introduced but the International Longevity Centre UK (ILC) has come up with a solution.
ILC chief executive Sally Greengross has said increasing the average retirement age by just one extra year would bring in £13 billion but she warned that in order to keep people working, 'real political and financial investment in the prevention of ill health could save money for health and social care'.
I agree with Greengross that we need to spend money on prevention rather than an unaffordable cure. By investing money in helping people to stay in the workplace along with political reform to increase the age at which people retire we will benefit from the experience of older people in the workplace and save money on not just pensions but social and health care.
If we don't adopt this strategy then fewer workers will be left with an increasingly large bill for an increasingly large part of the population.
Speculating now by helping old people stay in work means that further down the line we will all accumulate.