Intergenerational contract or conflict?

Lord Geoffrey FilkinChair, Centre for Ageing BetterFor Later Life Conference 2017

8 February 2017

Intergenerational contract or conflict?

Have things got worse for younger generations?

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Intergenerational relations in families

Intergenerational contract – the welfare state

Better later lives for all

Have things got better for older generations?

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Worse for younger generations?

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Generous company pensions – gone:

Housing - high cost, big deposits, buy later, fewer owners.

Poverty - growing in private rented working age households.

Worse for younger generations?

Wage growth stagnant - millennials earn less than predecessors.

Younger generations - usually better off than predecessors - not now.

Tax and benefit changes - mostly borne by working age households.

all pension risks put onto employeesinadequate savings ratesbig risks for later life

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Worse for youngergenerations

A more affluent and educated society than parents.

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But these changes not caused by older people and two big gains:

The opportunity of a longer later life.

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Better for older generations?

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Pensioner poverty halved since mid-1990.

Many more are living longer.

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Better for older generations?

Many have good defined benefit pensions.

Many more are owner occupiers, often debt free.

Escalation of house prices has increased wealth - for some.

Average pensioner household income higher than working age households.

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Better for oldergenerations

Big social class and gender variations.

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But… not better for all, big inequalitiesin later life now:

Many older people are still in poverty, ill earlier and die younger.

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Intergenerational relations in families

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Longer lives means many more grandparents alive.

Families can adapt to and benefit from longer lives.

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Intergenerational relations in families

Family support for house purchase - 50%.

Family caring - more carers and caring both ways

Social, financial and emotional support - both directions

Solidarity looks alive and well - in families.

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And not all families can provide these exchanges:

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Intergenerational relations in families

But… not everyone has a family or children.

some are already without social care support

some will not get family wealth and support

some risk big drop in later life income

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Intergenerational relationsin families

So is intergenerational conflict the wrong debate?

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Is the real issue how we enable better later lives for all?

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Intergenerational contract - the welfare state

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Funded by the working age population via welfare state.

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Intergenerational contract - the welfare state

Age was implicitly seen as a proxy for need or poverty.

Designed to support older people who could not work with income support.

And to ensure decent health care for all ages.

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Intergenerational contract- the welfare state

A much longer life requires more income to support it.

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More older people will contribute to ongoing rising demand and cost in health and social care.

But… longer lives and a larger older population challenge this:

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20% More people aged 65+2015-25 in England

38% More people aged 85+2015-25 in England

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Intergenerational contract - the welfare state

Consider the scale of the change…

…with fewer working age households to pay.

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Better later lives for all generations

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Better later lives for allgenerations

How to ensure decent health and social care needed?

And help tomorrow’s pensioners have adequate incomes?

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For good longer lives for all generations do we need…?

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Better later lives for all generations

Higher productivity and wage growth.

More housing for all generations.

Good health and social care services for all.

To be able to work longer, to save more.

Increased taxes to fund good standards.

Tax and benefits based on need not age.

A fair distribution of the burdens and benefits.

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Better later lives for allgenerations

We need to expose these issues – government will not.

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And debate how we enable better ageing for all generations.

There is an implicit deal here:

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Lord Geoffrey FilkinGeoff.Filkin@agebetter.org.uk

@Geoff_Filkin

Centre for Ageing BetterAngel Building, Level 3

407 St John Street, London, EC1V 4AD

020 3829 0113www.ageing-better.org.uk

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