Gold Age Pensioners: Contribution outweighs costs by £40 billion

SOURCE: WRVS

DATE: 02-03-2011

A major new research study for WRVS by independent economists SQW, quantifies, for the first time, the economic and social contribution made by older people in Britain.  Based on a new economic model, Gold Age Pensioners reveals over 65s made a net contribution to the UK economy of £40 billion last year, even allowing for the costs of pensions, welfare and health services.  This equates to just over £100 million per day, challenging the widely held view that older people progressively become a burden and a drain on society.  The research shows that older people not only make a positive net contribution today, but this is set to almost double as the overall number of people over 65 increases and people remain healthier for longer.  According to the findings, the net contribution to the UK economy of older people will rise to an estimated £77 billion by 2030.  

Gold Age Pensioners demonstrates that the economic contribution by over 65s through taxes, spending power and donations is huge.  In addition to this, the report has for the first time put a financial value on their social contribution such as the provision of social care by older people and the hidden value of their volunteering work.  Provision of social care by older people is worth £34 billion, growing to £52 billion by 2030, and the value of older people’s volunteering work has reached £10 billion per year.
The report also reveals that older people are often the social glue of community life – making active contributions based on values of community spirit and neighbourliness.  This ranges from leadership or high levels of membership of local clubs and societies to informal support looking out for vulnerable neighbours and helping them stay independent for longer.

Lynne Berry OBE, chief executive of WRVS said: “A measure of society is how it sees its old people.  In many other cultures older people have an elevated status and respect.  The opposite is too often seen here in Britain.  Their contribution often gets overshadowed by the negative attention given to the costs of future welfare in an ageing population. 

“Not only have we shown that the over 65s’ financial contribution is huge (and rising), we’ve also uncovered the crucial community roles that many of our pensioners are playing in society.  The WRVS army of 45,000 volunteers, many of whom are over 65, are testament to the power of acts of neighbourliness and community spirit – and we want to celebrate these real social networks that are making Britain a great place to grow old. We hope these findings will play an important role in changing outdated attitudes towards older people and encourage even more people to volunteer for organisations like ours.”

Stephen Lucas, SQW economist and Director, who wrote the report, commented: “By 2030, there will be three million people over 85 in the UK and 15 million over 65.  The baby boom generation is hitting 65 from this year onwards.  Healthy life expectancy has never been greater.  You can easily see how the debate becomes focused on the resulting cost on the state.  The implications of an ageing population have been extensively explored, but is the assumption that older people represent a net cost to society accurate?  Our findings refute these assumptions and provide a positive and healthy perspective for the age debate.”

Professor Tom Kirkwood CBE and director of Newcastle University's Institute for Ageing and Health said: "Our society is still hopelessly stuck with the mistaken view that older people are a burden. This factual analysis by WRVS shows the opposite to be the case.  Older people more than pay their way on current reckoning. And if we can only open our minds to the additional potential of a world in which we all live longer, and stop sidelining the mental capital of our older fellow citizens, how very much more will become possible."

Additional statistics

  • The number of older people in Britain over the age of 85 is set to climb to more than 3 million over the next 20 years

  • Net contributions to the UK economy in 2010 by older people were more than ten times the value of the UK music industry (£3.9bn in 2010, PRS Music 2010) and more than eight times the value of the UK chocolate confectionery market (£4.9 billion in 2010, IRI Infoscan 2010)

  • Tax revenues: Older people contribute substantial tax revenues, amounting to around £45 billion per annum in 2010, rising to an estimated £82 billion by 2030 (This marked projected rise is to a number of demographic and economic trends, such as increases in Healthy Life Expectancy (HLE), and policy initiatives such as deferred retirement age)

  • 65% of older people regularly help out elderly neighbours – and are the most likely of all adult age groups to do so  (ICM research, February 2011, commissioned by WRVS)

  • Older people spend more time than any other age group in leadership roles, spending an average of 5 hours per month (ICM research, February 2011, commissioned by WRVS)

  • Almost half (49%) of older people who informally volunteer, look after younger children/grandchildren and a further 30% help younger (under 65) neighbours (ICM research, February 2011, commissioned by WRVS)

To find out how you can get involved in WRVS work in communities across the UK and to download a copy of this research visit goldagepensioners.com

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For all media enquiries, please contact Katie Gosden or Nicola Forsyth at Blue Rubicon on 020 7260 2700 or wrvs@bluerubicon.com

About the research
WRVS commissioned economists SQW to create the economic model that underpins this in-depth study and primary research was carried out by ICM.   Experts from a range of fields (including Volunteering England, Carers UK, Office for the Civil Society, CIPD) contributed alongside an extensive literature review.  The research was independently reviewed by two academics: Professor Tom Kirkwood CBE FMedSci, Director, Institute for Ageing and Health Newcastle, University Campus for Ageing and Vitality and Robert McNabb, Professor of Economics, Cardiff Business School.  

About SQW
SQW is one of the leading independent public policy and economics consultancies in the UK. Established in 1983, SQW employs over 75 multi-disciplinary professionals working across a range of markets, and for clients at national, regional, sub-regional and local levels on economic strategy and public policy matters.