Insights
The United Kingdom is going through a demographic turn that will shape it for the rest of the century, and it begins with a single number: the birth rate. This study draws together the official data, from the Office for National Statistics, the national records offices and the Office for Budget Responsibility, to trace one connected story. A birth rate that has sat below the level needed to replace the population for half a century leads, with a long lag, to a workforce that stops growing, a population that ages, and public finances that come under slow but compounding strain. It is our analysis of published official data rather than a proprietary survey, and every figure is sourced at the foot of the page.
By Christopher Fagan
The total fertility rate is the average number of children a woman would have over her lifetime at current rates. In England and Wales it peaked at 2.93 during the baby boom of 1964, then fell sharply, dropping below the replacement level of 2.1 in 1973 and staying there every year since. After a modest recovery to around 1.96 by 2008 the decline resumed, reaching a record low of 1.44 in 2023. Scotland reached 1.25 in 2024, its lowest since records began in 1855. A rate below replacement does not shrink a population immediately, because people are living longer, but sustained over decades it removes the natural engine of population growth.
The consequence arrives with a lag of a generation, and it lands on the workforce. The people who staff the economy and pay the taxes that fund public services are, broadly, those of working age, and their numbers are now projected to grow only marginally. Between 2024 and 2049 the working-age population is projected to rise by about 5%, from 44.3 million to 46.5 million, and even that modest growth depends on migration. Over the same period the number of people aged 85 and over, the group that draws most heavily on health and social care, is projected to roughly double, from 1.75 million to 3.6 million.
This is the heart of the matter. The part of the population that produces slows to a crawl; the part that needs the most support surges. That gap does not close on its own.
The same shift can be read as a ratio. The old-age dependency ratio measures how many people of pension age there are for every 1,000 of working age. It is projected to climb from 280 in 2024 to 310 by 2034 and 329 by 2049, and that is after allowing for a rising state pension age, which flatters the figure. In plainer terms, the number of working-age people behind each pensioner is falling, from roughly three and a half toward three, and continuing down beyond the projection horizon.
Demography eventually shows up in the public finances, because an older population spends more on health, pensions and social care while a slower-growing workforce generates the tax to pay for it. The Office for Budget Responsibility, projecting fifty years ahead and citing demographic change as a central driver, expects public debt to almost triple, from under 100% of GDP today to over 270% by the mid-2070s. That is not a forecast of any single budget; it is the long-run arithmetic of an ageing society on an unchanged policy path.
None of this is a sudden shock. That is precisely what makes it a planning problem rather than a headline. Demographic change is one of the few forces in an organisation’s environment that is both large and largely predictable, and it moves over the lifetime of a strategy rather than a budget. A smaller and older workforce reshapes the labour market employers recruit from. A shifting population changes the demand that utilities and infrastructure providers must plan to meet decades out. Rising dependency and fiscal pressure change the environment for anyone whose work touches the public sector.
For organisations that plan over long horizons, the sensible response is to treat demographic change as a baseline assumption rather than a risk to be noted, and to build it into the operating model and into long-range workforce planning. The organisations that account for a slow, certain force early tend to be the ones not scrambling to react to it late.
This study is an analysis of published official statistics, not a proprietary survey. Fertility figures for England and Wales are from the Office for National Statistics; Scotland figures from National Records of Scotland. Population, workforce, dependency ratio and ageing projections are from the ONS 2024-based national population projections. The public debt projection is from the Office for Budget Responsibility. Projections are, by their nature, based on stated assumptions, particularly about migration, and are best read as trajectories on an unchanged path rather than predictions.
If demographic change is a factor in how your organisation plans for the long term, it is the kind of question we help clients work through. Get in touch.
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