FACTS AND FIGURES

• At the turn of the nineteenth century, there were almost 151,000 people aged 65 years and over in Australia, just 4% of Australia’s total population. By 2003, this proportion had increased more than threefold with people aged 65 and over comprising 13% of the population. In absolute numbers this amounts to over 2.5 million older people in Australia. This trend of an ageing population will continue.

• Population projections suggest that in 30 years time those aged 65 and over will represent 21.3% of the population and by 2051 they could represent a quarter of the population or between 6.4-6.8 million people.

• The population aged 85 years and over will also increase. This group has grown from representing 1.3% of the population in 1999 to 1.5% of the population in 2003. By 2051 it is projected that those aged 85 years and over will represent 5% of the population or 1.3 million people.

• The development of an ageing population is not confined to Australia. Other countries such as Japan, Germany, New Zealand and Canada will experience a doubling in the proportion of the population aged 65 and over in the next 50 years.

• The world’s population will reach 9.2 billion in 2050, with nearly three times as many people over the age of 60 and virtually all growth in the developing world.

• Baby boomers will be the main driver of the increased number of people 65 years and over. Their numbers will increase the over 65 age group by 50% over the next 10-15 years. Improved life expectancy will also see the numbers of people aged 80 years and over double during the next two decades.

• The proportion of the population aged 50 years and over is projected to increase, from 30% (6.0 million people) in 2004 to between 44% and 48% (11.9 million and 14.6 million) in 2051, and 46% and 49% (11.0 million and 19.9 million) in 2101.

• The population of traditional working age, 15-64 years, is projected to grow by over 20% by 2047, but to fall as a proportion of the total population by around 8 percentage points to 60%. The fastest growing group of traditional working age people is that aged 55-64, rising by nearly 50% over the next 40 years.

• By 2047, Australia’s population is projected to be 28.5 million. A quarter of the population is projected to be aged 65 and over, nearly double the current proportion.

• Currently there are 5 people of working age to support every person aged 65 and over, but by 2047 there will only be 2.4.

• Falling fertility rates and rising life expectancies are the main factors contributing to population ageing. Australia’s total fertility rate fell rapidly in the 1960s and 1970s, from 3.5 births per woman in 1961. The current fertility rate is 1.8 births per woman, slightly higher than in 2001, and higher than in most developed countries.

• Since the 1900s, Australians’ life expectancies have increased from 55 to 79 years for men and 59 to 83 years for women, and are now among the highest in the world. It is projected that life expectancies will increase further, reaching 86 years for men and 90 years for women by 2047.

• Over the next 40 years, living standards are projected to continue to rise, although at a slower rate than over the past 40 years due to population ageing.

• By 2046-47, government spending is projected to exceed revenue by around 3½ per cent of GDP. This compares to a projected fiscal gap in IGR1 of 5% of GDP by 2041-42. Spending pressures will be most significant in the areas of health, age pensions and aged care. Health spending is projected to nearly double as a share of GDP by 2046-47 due to ageing and, in particular, non-demographic factors.

• To provide an adequate yearly income for 20 years, a retiree needs to have saved about $400,000, possibly more. Researchers have found half of baby boomer men have managed to save less than $30,700. For women it is worse: half have saved less than $8000.

• Compulsory saving of 9% of income over a 40-year working life should ensure an income equivalent to 86% of pre-retirement earnings – comfortable enough to retire on. But most of the baby boomer generation who start to retire this year (2006) will have been saving for only 14 years. In future years the problem will diminish as those who have saved for longer retire. But though it is a transitional problem, it will last for decades.

• Retired singles who own their own homes will still need an income of more than $35,000 a year – the sort of annuity that can only come from having at least $500,000 put away. And that is assuming one only lives to current average age of 77.5 years for men or 82.9 for women. If one was to retire at 60 and be fortunate enough to live to 100, one would need nearly $800,000 invested conservatively for a 6% return.

• At age 65, Australia’s males now expect to live for a further 17.8 years and females for another 21.1 years, which is about six years more than their counterparts at the beginning of the twentieth century. Males and females aged 85 years can expect to live for a further 5.7 and 6.9 years respectively, which is about two years more than for the early 1900s.

• While overall life expectancy has again risen, the average man will also spend almost two decades – or 18.6 years – with a lesser disability. These include sight, hearing or speech difficulties, restricted use of feet or legs, difficulty holding or gripping objects, or any of a range of conditions that restrict everyday activities, such as recurrent pain, shortness of breath or emotional problems. For the average woman, 8.3 years of her life will be spent with a severe disability and 20.7 years with a lesser handicap.