THERE was some excitement last week when the first set of population information was released from Census 2021.
Tribal instincts were piqued until it became clear that the data on how many of ‘themmuns and usins’ there are will not be out until the autumn.
The statistics that were released did still provide important insight on a rapidly changing Northern Ireland, one where the population is getting older.
Population here on census day (March 21 2021) stood at 1.9 million, representing almost 3 per cent of the total UK population and just under 30 per cent of the total population on the island of Ireland.
Growth of 5 per cent since the last Census means there are 92,200 more people here than in 2011 and the population is the highest ever recorded for the region.
A rising population is generally a positive outcome for any economy as it can lead to increased labour market participation and creates demand for goods and services.
That said, a growing dependent population (i.e., children and old people) could create big challenges in terms of demand on public services.
This is why our population age profile is observed so keenly, and the NI Census results have confirmed an ageing population.
The over 65 age group currently make up 17.2 per cent of our total population. A decade ago, our over 65s accounted for 8.1 per cent of total population.
The number of people aged 65 and over is 24 per cent larger than it was in 2011 and there are now 27 people aged 65 or over for every 100 people of working age.
The trend towards an older population is not likely to slow in the immediate future as the post war Baby Boom generation continues to age.
It is great news that people are living longer and it is important to remember that the older generation are crucial to so much of our economic activity, be it through their own spending or through their providing the unsung family supports that help many of us juggle work and family commitments.
There are however societal, economic and fiscal considerations that have to go with an ageing population.
Economically an ageing population has an immediate impact on the supply of workers. We are already hearing about skills supply challenges in the labour market as the increased numbers of migrant labour that had been boosting working age population returned home after Brexit and during the pandemic.
Without this source of international labour, the quickening flow from working-age to retirement age here is going to exacerbate labour market challenges.
A shortage of working-age people to fill jobs has knock on impacts in terms of constrained business capacity to service demand.
An increasingly aged population will inevitably put increased pressure on health services as older people are typically more intensive users of health and social care services compared to other age groups.
This increased pressure will force choices on budget allocations, taxes, and the scale of available services through the health service.
On budgets, we have already seen the introduction of a dedicated tax to support in funding spending allocations for health and social care.
The problem remains however that the health and social care levy is a tax on employment and population trends are not favourable in terms of the numbers of working age population.
Another obvious challenge of an ageing population is in welfare payments.
The UK government spent £125 billion on pensions last year. In 2025/26 this is expected to be £161 billion.
With government orthodoxy tending towards ‘balancing the books’, these are significant amounts of extra money to be raised.
Our population is getting older, and that must prompt serious planning about the services the public sector delivers and how those are funded.
The obvious response is to raise the retirement age, something that the UK government has done, and is keeping under review.
As it stands, the average retirement age in the UK is just below age 65. While there is no longer a statutory retirement age, there does not appear to be a large appetite for people aged over 65 to keep working.
With skills shortages and an increasingly older population, a key challenge in the years ahead will be trying to make remaining in the labour market an attractive idea for older people.
Andrew Webb is chief economist at Grant Thornton
