‘The longevity dividend: how the UK’s G20 can turn demographic change into economic growth’

As leaders prepare for this week’s G7 Summit in Evian, France, the UK needs to consider what its agenda and legacy will be when it chairs the G20 in 2027 and the G7 in 2028. This is a key moment for the UK to set a global agenda that responds to current and future opportunities.

A key issue for all G20 nations is population ageing. 

In every G20 country, people, especially women, are living longer. By 2050, over 30% of the UK’s population will be aged over 60; and in countries further along this transition, such as Japan and Italy, the figure will exceed 40%. Other countries are catching up fast – with Brazil and China projected to reach nearly 30% and over 35% respectively within the same timeframe. This is almost always framed as a problem, with discussion focusing on rising pension costs, pressure on healthcare systems, and a shrinking tax base.

But there is another way to view this.

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We would all wish for ourselves and our loved ones to enjoy a long, healthy, and dignified life. With the right policy response, longer lives can bring benefits not only to the individual but to the wider society and economy. Across the G20, people aged 50 and over already account for around a third of total earnings; by 2035 this cohort is projected to account for nearly 40 per cent of the entire G20 workforce. Older people create jobs too. They are not passive recipients of public spending, but employers, consumers, investors, leaders and entrepreneurs.

The International Longevity Centre has estimated that if G20 economies employed the same proportion of people aged 50 and over as Iceland, global earnings could rise by $3.7 trillion – equivalent to roughly seven per cent of GDP on average across G20 members. In our current straitened economic circumstances, this could be transformational, as a source of growth that is not only currently under-utilised but which is both sustainable and resilient.

Collectively we already have some of the answers as to how best to create the conditions for this to happen: investing in preventative health services and social care; workforce, skills and training opportunities; and financial systems to keep people active, involved and solvent throughout their lives. There is much that we can learn from G20 countries which are also experiencing this demographic transition. For example, the Japanese Government has invested in creating “silver human resource centres” to provide personalised support and advice to jobseekers over 60.

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The G20 was created to support member states to address economic challenges collectively, so the forthcoming UK G20 Presidency in 2027 presents an opportunity to look at the upside of demographic change. Sometimes there is a mismatch between the issues discussed in global fora and the concerns of the British electorate. But how we support and optimise the contribution of our older people is central to our national political debate. Including a positive, growth-oriented approach to ageing and the economy in the UK G20 agenda would link both to the Government’s missions for change and the everyday concerns of the UK public and media. It would enable the Government and our world class financial services companies to contribute expertise and be at the forefront of shaping an international response to a shared challenge.

We are living in an era of rapid and unpredictable change, with the climate crisis, artificial intelligence and conflict presenting huge challenges for national governments the world over. Ageing populations are another mega-trend, but demographic change is predictable decades ahead. Like our response to climate change, action now will prevent worse impacts later. By tasking G20 Finance Ministers with sharing the policy reforms needed to support longer, more productive working lives, and sharing experience on turning political commitments into practical delivery, the UK’s G20 Presidency could give us a rare opportunity to show decisive global leadership on a challenge that faces all its member states. 

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