Is a longer life always the better option? Economist, author and longevity expert Professor Andrew J Scott speaks to Miriam Fine about how policy makers, professionals and individuals can redefine ageing to help everyone in our society thrive, no matter how long they live.

Living longer is something Australians are very good at. According to the latest Australian Bureau of Statistics study on our population, the number of people aged 85 and over has more than doubled in the last twenty years (an increase of 110 per cent). This compares with a 35 per cent increase in our population overall^[1]. Women take a slight lead over men in the life expectancy stakes and a baby girl born in 2021 has an almost 40 per cent chance of celebrating her 100^th birthday^[2].

As financial planners know well, this rapid rise in longevity is producing concern among Australians about two critical factors that can impact their life in old age – their health and their finances. In the ABC’s Australia Talks survey of more than 50,000 Australians in 2019, saving enough for retirement was the number two worry for respondents (62%) followed by health at number three (56 per cent). Both were eclipsed by climate change which was the top concern for 72 per cent of people surveyed^[3].

Coming in at number four was a fear of growing old. The survey found that half of Australians worry about ageing. Given their chances of living well into their 80s and perhaps living through an entire century, it’s something they need to get comfortable with and prepare for. This is exactly the reason for much of the research and advocacy work that Professor Andrew J Scott engages in. As an expert on the opportunities and challenges of our growing longevity, here and Australia and around the world, he is a thought leader on the economic and social impacts of living longer.

The evolution of life expectancy

Based at London Business School, Professor Andrew J Scott is a Professor of Economics and Research Fellow at the Centre for Economic Policy Research. His book with Lynda Gratton, The 100-Year Life, has been published in 15 languages and is an Amazon bestseller and his 2020 book, The New Long Life, considers how the challenges and opportunities of social and technological ingenuity might shape a new age of longer lives.

As well as being a published author on longevity, Professor Scott is co-founder of The Longevity Forum, a member of the World Economic Forum council on Healthy Ageing and Longevity and a consulting scholar at Stanford’s Center on Longevity. Having studied the impacts of demographic changes on societies and economies and the responses of policy-makers for decades, he sees a relatively narrow focus from governments on the issues and opportunities longevity presents.

“Making gains in life expectancy is nothing new,” he says. “In the 20^th century we’ve seen people living much longer lives on average with reductions in infant mortaility and improved protection from infectious diseases. But now these gains in mortality are coming later in life with a growing number of people living well past the typical retirement age.”

Figures from the United Nations are projecting a dramatic increase in this age group. By the end of the 21^st century, 22 per cent of the global population will be aged 65 or older. That’s more than double the proportion of 9.3 per cent reported in 2020^[4]. This relative growth of our oldest population cohort is the chief focus of many governments and central banks.

“The idea of an ageing population looms as a significant threat for today’s economic leaders,” says Professor Scott. “With birth rates falling, it’s expected that younger cohorts will be smaller, leading to fewer people in the workforce. This leads to lower tax receipts and a slowdown in economic growth overall. At the same time, older generations are likely to have more savings, so inflation is expected from lower production and higher demand.”

“So it’s no wonder this change in our population structure is dominating the policy agenda,” he adds. “But if we switch to a longevity perspective, this places the focus on changes in how we age and how we can exploit life-expectancy gains. For example, the idea that our workforce is dwindling because of ageing is not actually the case. Older people are working for longer – 80% of new employement is coming from people over the age of 50 – and this is actually a boost to GDP driven by the impacts of increased longevity.”

Challenging ideas about ageing

Of course Professor Scott acknowledges that older people staying in the workforce is often their best option for funding a longer lifespan. This financial challenge is one of several thorny issues – along with health and social inclusion – that have yet to be resolved for our ageing population. But in order to have our whole society engaged in the solutions, Professor Scott thinks it is important to celebrate increased longevity as a way to combat prejudice and discrimination against people as they age.

“The fact that we’re all living longer lives is a great achievement,” says Professor Scott. “We now have far more grandparents – even great-grandparents – able to meet and get to know their grandchildren. And there is such potential for older people to offer a greater understanding of themselves and others and many other types of wisdom to our communities and society.”

“Unfortunately in many developed countries we still see people in retirement and old age being treated as less capable and productive,” he adds. “They lose their role of being useful in society and will often become segregated. In fact the level of ageism we see is still a significant problem to be solved if we’re to properly address the challenges that our world faces now more of us are living longer. The way older people are discriminated against would be completely unacceptable if it were happening on the basis of race or gender. These types of prejudice are often a result of people seeing someone as ‘other.’ The fact is that young people today have a greater than 80 per cent change of living to age 90. So it’s important for every young person to ask themselves, how do I want to be treated when I’m old and what options do I want to have?”

Answering these questions can be difficult when we’re accustomed to seeing old age as a time of life to be feared, not celebrated. As the Australia Talks survey suggests, we’re far more worried about poor health and poor financial outcomes in retirement than almost anything else in our lives. While these concerns do have a basis in what many older people have experienced, Professor Scott says we have far more choice in how we age than we might think we do. “How we age is not fixed,” he says. “Being healthy, happy and productive in later life is possible. We know this can be harder for some people to achieve as they age because of inequality in society and economic factors. And we certainly can’t control everything that will influence a positive experience of ageing.

“But it’s important to recognise that ageing is malleable. Researcher David Sinclair says that 80 per cent of our health and longevity is in our hands and only 20 per cent is down to genetics. People at all ages need to focus on what they can do now to invest in their happiness in the future, whether that’s a change that will boost your chance of better outcomes for your health or your relationships or your finances. Instead of seeing a decline in old age as inevitable we need a shift in mindset that can direct our behaviour now to help us prepare for the life we want as we age.”

A flexible view of life stages

Acting on this idea of preparing to age well long before passing the typical retirement age takes a commitment to the future that few of us are able to make without the right support and plenty of self-discipline. Providing expert advice and guidance to help people make the right choices now for their financial future basically sums up the fundamental purpose of financial advice. If financial planners and their clients are to make the most of their investments for the future – across health, lifestyle and relationships as well as finances –  this requires a fresh approach to the life stages that typically mark the progress of a financial plan

“In the 20^th century we developed a three-stage life broken down into education followed by work and then retirement,” says Professor Scott. “Now that people are living longer, what we’re seeing is governments and other services playing around with the parameters of these three stages. Many governments are delaying the official retirement age a little at a time to ease the pressure on funds available for pension payments and enable people to save more to self-fund for a much longer life in retirement. But this potentially leads to a future where we work for 60 years which is a pretty relentless prospect.

“What we can expect to see instead is the rise of a multi-stage life and we’re already beginning to see this happen,” he adds. “Many people are deciding to work part-time after passing retirement age and work well into their 70s. In G7 countries, between 2008 and 2018, the employment rate in people aged 55 years and older grew by 100%. Staying in the workforce for far longer is viable for many, providing you don’t lose your job in your 50s and struggle with the skills and discrimination that can sometimes be a problem for finding employment.

“People are also treating their careers differently and taking time out to care for parents or children or to reskill for a change in their career path. Just as teenagers and retirement were life stages that didn’t exist before the 20^th century, we’re going to see new life stages emerge in the 21^st century.”

Health, purpose and connection

This more fluid approach to life and work could be seen as a challenge for financial advice based on a model of steady accumulation followed by steady drawdown on savings. Preparing clients for a secure future by maximising their wealth through work and investments so they can enjoy that wealth for longer is what’s generally expected – by financial advice clients and financial planners.

As Professor Scott suggests, it takes a more flexible approach – to all the factors for successful ageing – if financial planners are to prepare their clients for a positive future before during and after their working lives. “Retirement is experienced by many as a cold shower,” he says. “Whether you’re well provided for financially or not, it can be a shock to leave work and lose your identity and purpose as well as your reason to keep active in mind and body. We want retirement to be more of a warm bath that you can slip into and feel comfortable instantly.”

“Health is key to ageing well and so are our relationships and our finances,” he adds. “In the 20^th century life insurance was invented because far more people died in middle age and they wanted to make sure they could provide for their loved ones. Now it’s living insurance that we need to make sure we aren’t outliving our skills, health and connections to friends and society as well as our finances.”

Preparing for the 100-year life

So how can the practice of ageing evolve so that individuals and society all reap the benefits of the extra years many of us can expect to live? At the government and corporate level there are many setting a good example for pro-active support of ageing as a wholly positive experience.

“Of all the developed countries, Singapore is one that is starting to wake up to this,” says Professor Scott. “They’re making changes to their health system to focus more on preventative health to help their older citizens thrive and take the pressure off their healthcare providers. Plus they’re fostering wellbeing and productivity in later life with a significant investment in adult education. On reaching the age of 50 anyone in Singapore can get an education grant. They can use this to reskill for a career or role that will last longer in an increasaingly digital economy but they don’t have to focus their late-life learning on work. The idea is for these older people to have a chance to engage with something new, to keep learning”.

“In the UK we’re seeing corporates introducing a ‘mid-life MOT’ to help employees in their 50s think about how well they’re set-up for retirement,” he adds. “They can attend four sessions to look at areas where they can invest to reap the benefits.”

However Professor Scott is in agreement with other longevity researchers who say that investing in health and wellbeing, finances and relationships should start well before mid-life.  Professor Perminder Sachdev, a neuropsychiatrist at the University of NSW, is leading the Sydney Centenarian Study and exploring how our behaviours, environment and genetics influence how successfully we age. The study has around 450 participants aged from 95 to people over 100 years old.

Although the study is ongoing, Professor Sachdev says existing research has already established that how we live from the day we are born can influence how well we feel in later life. “All we have [to work with] are lifestyle factors,” he says. “We realise that these factors impact from birth. Ideally one wants a lifetime of good effort.”

The behaviours we need to adopt if we’re to secure a comfortable, fulfilling life in old age are perhaps easier to follow when we acknowledge the biggest resources that longevity gives us – time. “You’ve got this extra time in your life and the question to ask is how do you want to use it?” says Professor Scott. “Some will be used to earn money but if we look at all the constituents of successful ageing we can see that time also needs to be spent on health, education and relationships as well as wealth.”

“This question of budgeting with time goes to the heart of the financial planning process,” he adds. “People have this portfolio of assets to manage for a rewarding life and money is one of them. Health, skills and a sense of purpose are some of the others and we need to keep investing in all of these. But we can’t invest in them all at the same time. Financial planning can be a very positive way of taking care of the financial assets so that more time can be spent on these other assets in the whole ‘lifestyle’ portfolio.

“This is why affordable access to high-quality financial advice is an important part of the framework we need to fully realise the potential of a 100-year life. Governments can help by changing policies that tend to push up the cost of advice. They also need to take action on preventative health, age discrimination, supporting people to work for longer and improving access to quality aged care. These are just some of the ways the policy agenda can enable people to be less afraid to live for longer.”

Andrew J. Scott is Professor of Economics at London Business School and a consulting scholar at Stanford University’s Center on Longevity. He is co-author of “The 100 Year Life” and “The New Long Life”. He will deliver the opeaning keynote address at the FPA Congress on November 2022. 

Footnotes

[1] Australian Bureau of Statistics, Twenty years of population change, 17 December 2020

[2] ABC News, Australians are living longer but what does it take to reach 100 years old?, Catherine Taylor, 28 December 2021

[3] ABC News, Australia Talks National Survey reveals what Australians are most worried about, Annabel Crabb, 8 October 2019

[4] UN Department of Economic and Social Affairs, Medium-variant projections for total population by sex (in thousands) for the world, for both sexes combined, by year. Population dynamics—world population prospects 2019 https://population.un.org/wpp/DataQuery/