Britain’s fertility collapse: Children today will have to retire at 75 to prevent pension time-bomb
Children in the UK today will have to work until they are 75 to maintain the country’s current level of support for pensioners, new analysis has found.
A report published by the Centre for Social Justice (CSJ) think thank examined the old-age dependency ratio (OADR), the ratio of working people to pensioners claiming state pension, and found that drastic intervention is needed to avoid a pension time-bomb or ‘baby bust’.
According to the analysis, there are simply not enough children being born in the UK to sustain the country’s economic model, leading to higher old-age dependency as a growing cohort of old and retired citizens depends on a dwindling pool of active workers for their welfare.
Under current fertility conditions, the total childlessness rate in the UK is predicted to be as high as 30%, the CSJ said.
In 2024, the UK’s Total Fertility Rate (the mean number of children per woman) fell to 1.41, the lowest ever recorded. Importantly, the TFR required just to maintain the current population (i.e., the replacement rate) is 2.1, which Britain has not acheived since 1970.
The result of this below-replacement fertility rate is an inverted population pyramid, where a decreasing number of active workers prop up an increasing number of dependent pensioners. In 1970, the Old Age Dependency Ratio (OADR) was 4:1, meaning four workers to every pensioner.
By 2025, this ratio had dropped to 3.5:1, propped up only by historically high migration. This ratio is set to plummet to 2:1 in the coming generations, the CSJ predicts.
To just maintain the current OADR, the state pension age would need to rise significantly over time. The CSJ’s analysis shows that if this were to happen, in 2093 the state pension age would reach 75, meaning this could apply to children at school today.
Putting an end to ‘Baby Boomer’ myths
To solve this problem, the CSJ said that the government should pursue pro-natalist policies, incentivising more Britons to have children earlier on to raise the TFR and improve the economic prospects of the country in the long term.
The system should be adapted to prioritise marriage and motherhood, the think tank said.
In addition to the measures described above, however, Britons will also have to face a harsh truth, especially those of the ‘Baby Boomer’ generation who have misconceptions over how the state pension is funded.
Many pensioners believe they ‘paid for’ their pensions themselves through the contributions they made throughout their working life, but it would be more true to say that they paid for the prevous cohort of pensioners and the current cohort of workers is paying for them.
Pension is funded as a benefit by current taxpayers, and the number of pensioners together with their health care places a heavy burden on the working population, the CSJ said.
“There remain many misconceptions about how the state pension is funded, with too many retirees believing that they have ‘paid for’ their pension rather than understanding that it is funded by current taxpayers,” it said.
The CSJ also said that policies such as the triple lock and the retirement age should be reconsidered, adding that if these policies are not changed adequately, the country may be unable to reverse its fertility collapse.
“It is also necessary to explain why having enough children is essential for the economic survival of the nation; too much policy is made assuming that children are a burden rather than central to the futures
of millions of people and the nation at large.”
