Britain must rebuild welfare for an older, sicker nation
Britain’s post-war welfare state was built for a younger, healthier and faster-growing country, and unless it is redesigned for an ageing, more insecure age, it will struggle to survive, writes Beccy Baird
The British welfare state was built for a country that looks very different from today.
Listen to this article
In the aftermath of the Second World War, a growing working-age population in stable, full-time employment could fund support for those who needed it. Lives were shorter, and there was relatively limited long-term illness. Those assumptions no longer hold true.
When the NHS was founded, only 11% of the population in Britain was over 65. By 2047, that proportion will be closer to a quarter. Even so, UK life expectancy is now among the lowest of high-income countries, and healthy life expectancy is declining, leaving many people spending years in ill health before they reach the end of life.
People living in deprived areas or facing other disadvantages are more likely to spend more of their lives in ill health as a result of wider social and economic inequality.
The NHS, originally designed to cure acute illness, now finds itself managing decades of chronic conditions, from diabetes to dementia, with inequalities in health caused by social conditions outside of its direct control.
At the same time, fewer children are being born. Just as in many other high-income countries, fertility rates have fallen well below the level needed to keep the population stable.
High housing costs, expensive childcare and insecure work, as well as personal choice, are pushing many people to delay starting a family or forgo parenthood altogether. That means fewer workers, fewer taxpayers, and growing pressure on the systems and public services that rely on them.
A changing labour market compounds this demographic squeeze. Employment rates may look similar to the post-war era, but the nature of work is very different. Stable, full-time jobs have given way to more fragmented, insecure employment, often with lower and more volatile incomes.
Meanwhile, the UK's tax system remains heavily dependent on earnings, compared with some other countries that take a larger share of their tax revenue from consumption, wealth, and property. Lower income tax means less money available for public services.
Migration has helped to mitigate the effects of the demographic squeeze. Migrants are disproportionately of working age, use fewer public services, are more likely to be employed, and make a small but positive contribution to public finances. They are also essential to the health and care workforce, where vacancies remain persistently high.
Recent reported reductions in migration risk exacerbating labour shortages in precisely the sectors under the greatest strain. Yet these realities are often ignored, reflecting a wider political discourse on migration that at times echoes and legitimises racist narratives.
The temptation is to treat the impact of this demographic change as a purely financial challenge, solvable through incremental reforms such as raising the pension age, tweaking taxes, and squeezing ever more efficiency out of public services. But that underestimates the scale of the shift. A sustainable welfare state in the 21st century will need to look fundamentally different.
It must place far greater emphasis on prevention and on helping people live longer, healthier lives, not just on treating illness. It will need a broader and more stable tax base. And it will require honest conversations about difficult questions about the role of migration, the design of work, and the balance of responsibility between the state, communities and individuals.
An ageing population is often framed as a looming crisis, but it is also a success with people living longer than ever before. The real failure lies in how poorly we have adapted to that success. The post-war model delivered extraordinary gains, and the task now is to redesign it for the society we have now.
____________________
Beccy Baird is a Senior Fellow at The King's Fund, leading research and analysis across a range of healthcare issues, having previously worked in the NHS and social care for more than 25 years.
LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.
The views expressed are those of the authors and do not necessarily reflect the official LBC position.
To contact us email opinion@lbc.co.uk