As the global population of those over age 65 reaches 1.3 billion in the next 20 years, this demographic cohort will have spending power that varies country-to-country as a variety of factors — such as the current COVID-19’s impact on pensions — affect household income.
In “Aging Matters: The Future of Older Populations” from Euromonitor, report authors Lan Ha and An Hodgson note that along with “other major driving forces, such as technological development and climate change, population aging will continue to shape the world we live in, prompting economies, societies and businesses to adapt.”
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Ha and Hodgson said in the report that with declining birth rates and rising life expectancy, “the older demographic is growing rapidly as a proportion of the global population, creating significant commercial opportunities and challenges, as well as giving rise to new societal, economic and consumption trends.”
The report revealed that the COVID-19 induced global recession “will pose a threat to pension systems and future pension payments, and since a portion of pensioners have investments in financial and property markets, they may face deteriorating earnings.”
As a result, the analysis in the report is forecasting global, average gross income of those over 65 to decline by 6 percent this year. Looking ahead in the long term, income growth is expected to vary.
The report stated that South Korea and Singapore as well as Puerto Rico “will join the top 10 oldest countries in the world by 2040.” But income gains are pegged to accelerate mostly in Asia.
“Older people in Asia Pacific are expected to see the fastest income gains of all regions over 2020 to 2040, with their average gross income predicted to rise by 97 percent, on the back of the region’s strong economic expansion,” the report stated. “North America and Western Europe will post the weakest income gains for the over-65 age group, although the older populations in these developed regions already enjoy some of the highest incomes globally.”
Drilling down into the impact of the pandemic, the Euromonitor report said the coronavirus outbreak has increased the overall awareness that the “global economy” and society needs to adapt to new realities. “As the population is aging, countries will need not only more healthcare workers, which can be challenging as aging countries also see their workforce shrinking but also more hospital beds, in order to be better prepared for growing treatment needs,” the report said adding that the pandemic also “highlighted the benefits of using technology in health care for older people.”
This underscores a growing need for online consultations and telemedicine along with digital devices that will “help in taking good care of older people during a pandemic, as well as to cope with any long-term shortages of healthcare workers.”