Baby boomers are being encouraged to stay in work later in life as the International Monetary Fund (IMF) have declared a need to make use of the rising “silver economy” caused by the ageing global population.
The financial agency declared that “the 70s are the new 50s” as older people today are far sharper and stronger than they were 25 years ago, meaning they are able to work longer.
The IMF coined the term “silver economy” to refer to the rising opportunities of an elderly working population as the average of the world’s population is projected to increase by 11 years between 2020 and then end of the century.
It released findings after data from 41 different countries revealed a huge improvement in healthy lifespans, with the financial agency suggesting that nations could “harness the potential” of ageing populations to boost financial growth. The results were based off detailed surveys of one million people aged 50 and older, testing functions such as orientation, mathematics and memory.
The IMF found that a person aged 70 in 2022 had the same cognitive function as the average 53-year-old in 2000, placing them far ahead of the Noughties’ septuagenarians. As well as cognitive function, physical health had significantly improved as 70-year-old boasted the same fitness as 56-year-olds 25 years ago based on grip strength and lung functionality tests.
The IMF suggested this rapid improvement was set to continue over the decades, even if it slowed down in pace.
While remarking the positives of a healthy ageing population, the Fund warned that governments in debt could not afford to let this growing number of fit and sharp older people go into a long retirement, instead suggesting that these people should be encouraged to stay in work to offset a growing imbalance between workers and retirees.
The IMF said: “Declining birth rates and increasing life expectancy are leading to a sustained decline in population growth and significant changes in the age structure of economies.
“As the share of the working-age population starts to decline in more and more countries, and the workforce becomes tilted toward older ages characterised by lower labor force participation and employment rates, demographic forces seem to be casting long shadows over prospects for living standards and public finances.”
They predicted that as birth rates continue to decrease, the global population growth would slow from 1.1 per cent per year prior to the pandemic to near-zero in 2080 and 2100.
The UK state pension age is currently 66 for both men and women. It is set to ruse rise to 67 between 2026 and 2028, and eventually to 68 between 2044 and 2046 for those born on or after April 5, 1977.
The Fund argued that governments could change pension ages and encourage workers to delay their retirement, even slashing early retirement benefits in order to ease fiscal pressures caused by an ageing population.
It said: “With lower growth prospects and historically high levels of public debt, many countries will need significant fiscal efforts to keep debt-to-GDP ratios stable beyond 2030.”
As well as encouraging a change in retirement policies, the Fund relayed the importance of policies that support healthy aging and close gender gaps in the workforce, such as better childcare support and parental leave policies, which they predicted would offset the slowing growth from having fewer young people and more older people.
Fertility rates in England and Wales dropped to the lowest rate on record in 2024, as women had an average of 1.44 children between 2022 and 2023, according to the Office for National Statistics.
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