CHAPTER 1: Scope of the Inquiry |
1.1. One of the greatest achievements of the past
150 years has been the increase in average length of life. In
the middle of the nineteenth century, average life expectancy
at birth in England was just 42 years, by 1911 it was over 50
years, and today it is over 75 years for men and 80 years for
Not only do we live much longer lives than our forebears, but
we also live healthier lives, and today the majority of people
aged over 65 are healthy, fit and active.
1.2. This remarkable improvement in the life chances
of British citizens is one of the most obvious benefits of the
economic growth and scientific progress of the past two centuries.
Our society has adjusted readily and enthusiastically to the new
opportunities and challenges offered by longer and healthier lives,
and it seems reasonable to believe that we will continue to adjust
successfully to future increases in life expectancy which will
occur in the 21st century.
1.3. Our society has also adjusted to a fall in average
family size, as women have chosen to have fewer children. Women
born in the mid-1930s had, on average 2.45 children, but those
born in the mid-1950s had on average 2.03 children, and for women
born in the mid-1970s it is expected that average family size
will fall to around 1.74 children.
1.4. This fall over time in fertility, together with
the simultaneous improvement in mortality, has reduced the relative
size of the child population, and increased the relative size
of the pensioner population. This upward shift in the age structure
of society is what is meant by the term "ageing population".
The ageing of the population has enormous economic implications;
indeed, it has the potential to have an impact on all sectors
of the economy and all aspects of economic activity.
1.5. We recognised at the outset that it would be
essential to focus our inquiry, and a strategic decision was taken
not to examine the issues of long-term care and health, which
have recently been the subject of investigation by the Royal Commission
on Long-Term Care and the Wanless Report.
We decided to concentrate on the issues of employment and income,
in particular in relation to length of working life and the position
of women, and to focus on the fundamental principles involved.
In our consideration of income in retirement we have chosen not
to examine in detail the operation of the current pension system,
which is an issue that has recently been reported on by the House
of Commons Work and Pensions Committee.
Instead we have directed our attention to the general principles
and structure of the UK pension regime.
1.6. The inquiry was formally launched in December
2002 with the issue of the call for evidence reproduced in Appendix
4. We received written evidence from a wide range of sources,
which are listed in Appendix 3. The written evidence was complemented
by oral evidence received at 21 public hearings between February
and October 2003. The oral and written evidence is published in
volume II. We are extremely grateful to all those who provided
us with evidence.
1.7. Our Specialist Adviser was Professor Paul Johnson,
AcSS, Professor of Economic History at the London School of Economics
and Political Science. He contributed to all aspects of the inquiry
and the final report. We are especially grateful for his assistance
in eliciting and evaluating our evidence.
2 Government Actuary's Department, National Population
Projections, 2000-based (TSO, 2002), p 22 Back
GAD, National Population Projections, 2000-based, p 18 Back
Royal Commission on Long-Term Care, With Respect to Old Age
(1999) (CM-4192-I); Derek Wanless, Securing Our Future Health:
Taking a Long-Term View (2002) Back
Work and Pensions Committee, 3rd Report (2002-03): The Future
of UK Pensions, (HC 92-I) Back