Pensions, birth and mortgage rates

[Paperandpen123]

Thinking about a few threads I’ve read today. What’s everyone solution or thoughts for the lowering birth rates? Which in turn affects pension and economy?

I think birth rates are dropping due to a number of factors; more social acceptance having no child’s / better contraception. But also higher mortgage / interest rates, so people can’t afford to have more kids, can’t afford to move to a bigger house. More grandparents working longer so can’t help with childcare (if they wanted to).

Is it a ticking time bomb? Aging population with lower birth rates so less taxes coming in? Or scaremongering?

Yes I agree this is absolutely a ticking time bomb! The state pension age will go up no doubt. People are living for longer due to advances in healthcare but often having a lower quality of life and living in expensive care homes.

The current generation don't have DB pensions and most have inadequate pension savings. They will need to be supported by the state. We need more children to be future taxpayers, and generally to higher income families (hence why the £100k childcare cap is so short sighted).

If we won't encourage more people to have more children (child benefit, childcare costs etc) then we need to be comfortable with net inward migration of working age adults. Unfortunately a certain demographic are not happy to encourage either.

However I think that a demographic reason that the birthrate is declining is due to women having children later in life. Once (and if) this starts to stabilise and not get later the birthrate may slightly increase. However even objectively we are not having enough. Every woman needs to have 2 children to keep the population stable, and this isn't happening generally - I know so many that are one and done for various reasons.

The world is changing due to massive technological advances. The idea that we’ll be living in a similar situation as now but with just fewer people entering the workplace because of low birth rates is completely missing the point that vastly fewer professionals will be needed to do the same work just as fewer people are needed in supermarkets, warehouses and factories as automation and robotics take over. Autonomous vehicles are also on the way.

There is the potential for the following positive scenarios to play out.

A highly skilled smaller workforce could earn more and offset the smaller number of people working.

AI could improve productivity & potentially again result in higher salaries

Robotics, AI and automation could be taxed to make up for the smaller workforce required to do the work that currently requires larger numbers.

No idea how these will pan out in practice but they are being discussed on current affairs podcasts. It requires structural reform. The richest people will be making shedloads and be using their positions to resist the structural change required to tax automation.