Healthier lifestyles will not defuse the demographic time bomb


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How healthy living is costing us more in the long term and Taxes December 2015.pdf
As the British population gets older, spending on healthcare, social care and pensions will consume an extra five percent of GDP over the next 50 years. This is the equivalent of more than £90 billion today.

In a new report from the Institute of Economic Affairs, author Christopher Snowdon debunks the myth that healthier lifestyles lead to lower healthcare costs. Death and Taxes: Why Longer Lives Cost Money shows how the ageing population puts a major strain on government budgets.

The debate around reduction of healthcare costs is often focussed on how the consequences of unhealthy lifestyles – such as obesity and smoking – incur the highest expenditure. Not only is this untrue, says Snowdon, but it ignores the much larger costs associated with welfare and social care (such as nursing homes). Largely as a result of healthier lifestyles, people are living longer, but they are living longer with chronic, non-fatal conditions which require expensive medical treatment over a longer period of time.

Key findings:

  • Annual healthcare costs of a person aged 85+ are five times higher than those of a person in their 60s, and ten times higher than somebody in their 40s

  • Spending on healthcare including social care and pensions will consume an extra 5 per cent of GDP over the next 50 years, which is the equivalent of more than £90 billion today

  • Although life expectancy has increased, healthy life expectancy has risen more slowly. British men can expect to live in poor health for eighteen months longer than they did in 1990

  • There is little evidence to support the popular belief that drinkers and obese people incur higher costs to the NHS over the course of a lifetime. Smokers’ costs are significantly lower than non-smokers’ costs

Over the last 70 years, life expectancy has risen from 68 to 81, but these extra years of life come about when people are are economically inactive, meaning the burden of increased costs falls on the working population.

Social security costs – particularly pensions – tend to be overlooked by those who claim that unhealthy lifestyles are a ‘drain on the taxpayer’. In fact, they are the biggest cost associated with the ageing population.

In this thorough review of the economic evidence, which challenges the common belief that healthier living reduces public expenditure, author Christopher Snowdon demonstrates how long-term healthcare costs and pensions are becoming unmanageable, and asks how an ageing society can be sustained.

Commenting on the report, Christopher Snowdon said:

“Absurd claims have recently been made about obesity bankrupting the NHS. The economic evidence is quite clear that it is the ageing population, not obesity, drinking or smoking that is the real threat to public finances. Instead of using those who lead unhealthy lifestyles as scapegoats, we must accept that healthier living merely postpones the costs of disability and disease, and paves the way for higher costs further down the line. Healthier living and longer lives may be socially desirable but they come at a cost and in a state-run system the cost inevitably falls on the taxpayer. The reality is that it is healthy, not unhealthy, lifestyles that have driven up costs and they will continue to do so.”

Notes to editors:

To arrange an interview with an IEA spokesperson, please contact Nerissa Chesterfield, Communications Officer: 07791 390 268 or Stephanie Lis, Director of Communications: 0207 799 8909

The full report, by Christopher Snowdon, Death and Taxes: Why longer lives cost money, can be downloaded here

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.