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fiscal policy

Who cares about social care?

Soumaya Keynes, of the Institute for Fiscal Studies (IFS), examines why the private market fails to provide insurance against high social-care costs in old age, and the issues faced by the government when attempting to correct this market failure

Sandor Kacso/Fotolia

In 1980, a 17-year-old boy could expect to live to 72 in the UK. If he had a son at the age of 30, that son could expect to live to the age of 79 — 7 years longer than his father. This increase in life expectancy over time is happening for two reasons. First, because healthcare is improving, and second, people are leading healthier lifestyles. However, as people live longer, the overall UK population is ageing and the fraction of the population aged over 65 is set to increase over time. In 2013 one in six people in the UK is aged over 65 but by 2023 it will be one in every five and by 2060 one in every four. As a result, more people will be subject to the risks associated with ageing.

To give examples of the risks that more of us will face, the chance of developing Alzheimer’s disease doubles about every 5 years after the age of 65, reaching almost 50% by the age of 85. Similarly, while around 20% of men and 28% of women aged 65–69 have at least one ‘limitation with an activity associated with daily living’, the proportions more than double to 45.4% for men and 62.0% for women for those over the age of 80. Such activities include dressing, walking across a room, bathing or showering, eating, getting out of bed and using the toilet. These numbers are based on the current elderly population and these risks may fall as younger generations live healthier lifestyles and reach old age in better health. However, as the underlying causes of dementia and other conditions in old age are still relatively poorly understood, it is unlikely that medical advances will eliminate these risks soon.

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