Kenneth MacKenzie, managing partner, Target Advisers, considers the implications of our ageing population, including the background to and the scale of the problem in the UK, the challenge ahead and the potential opportunities it brings to the care home sector
People are now living longer across the developed world. Of course, this is great news. While the fragility of life is a reality, the prospect of us all, on average, having more years in which to enjoy the fruits of our labours is a fine prospect.
When people write about the demographic time bomb, the focus is typically on the growth in the number of people aged over 65; this group is set to grow by 50 per cent over the next 20 years. However, as you go up the age range, the statistics are much more compelling for those who invest in the provision of care homes for the over 85s. This group is set to double over the next 20 years and treble over the next 30, and about 15.8 per cent of those aged over 85 will spend their final days in residential care. So, how will we cope with our ageing population?
The over 65s are estimated to be in possession of £1 trillion in net equity. They are of the generation that has greatly benefited from the home ownership that has developed since the Second World War. Houses acquired during the Margaret Thatcher era when council houses were sold off across the land have made many people much wealthier than they might otherwise have been. Of course the pound in 2016 is very different in terms of value to the pound of 1980, but home ownership grew from 55 per cent in 1980 to include 64 per cent of the population in 1987. By the time Margaret Thatcher left office in 1990 it had reached 67 per cent.
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