While the population is expected to continue growing in the coming decades, the pace will slow. Between mid-2018 and mid-2043, the total will increase by just 9%, down from the 15% expansion in the previous 25 years.
And as it grows, the population will age. The proportion of people aged 85 or older is expected to almost double in the coming quarter of a century, according to the ONS. From 2028, while both the working age community and the number of children flatline, the gray contingent surviving long enough to qualify for a state pension surges.
That risks creating an economic imbalance, with too few workers paying taxes and national insurance to support the retired crowd at the top of the demographic pyramid. The percentage of the population that’s old enough to draw a pension will increase to 22% by 2043, up from 18.5% in the middle of last year, according to the ONS figures.
As the baby boomers born after World War II and into the 1960s start to die and the so-called replacement rate slows, the number of births and deaths starts to become almost equal from the mid-2030s. Hence the need for immigrants, who are typically of working age, to keep the population growing.
The ONS bases its projection for net migration in the coming quarter-century on the annual average for the past 25 years of 190,000. Now, that could increase or decrease; in its previous projections, the statistics office used a lower figure of 165,000 per year to reflect the mean data for the quarter century to 2016.
The statistics office is at pains to stress the impartiality of its data gathering. “National population projections do not attempt to predict the impact of political circumstances such as Brexit,” the study says. Nevertheless, the data is incontrovertible. Given its ageing population, Britain needs immigrants and their economic output to support the retirement population. Even if it succeeds in eventually extricating itself from the EU, the U.K. can ill-afford to raise the drawbridge to overseas workers.
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Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”