Scotland faces ‘unique demographic challenges’

The nine-page report, published by the International Longevity Centre, Scottish Independence: Charting the Implications of Democraphic Change, found that a “perfect storm” of declining oil and gas revenues and “unique” demographic challenges would place downward pressure on government spending, while putting upward pressure on taxation.

The paper stated that these factors will require the Scottish government to rethink spending and respond to a 40 per cent rise in the state dependency ratio over the next two decades, more than the 30 per cent rise projected in England.

This problem will be exacerbated by a sluggish fertility rate and the number of active workers in Scotland, both of which will be more acute north of the border.

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David Sinclair, assistant director of policy and research at the ILC, said: “Economic policy will need to incentivise longer working lives and policymakers will need to deliver increased investment in capital to improve the productivity of the workforce and drive economic growth.”

He added that policymakers must pay “significant attention” to improving health standards in Scotland.

Gordon Brown, the former prime minister, entered the fray during a speech at Glasgow University by arguing that an ageing Scottish population will be “better protected” if pension liabilities can be pooled across the UK.

Jeff Lewis, director of Edinburgh-based Robson Macintosh, said: “The fact that our economy is skewed towards the public sector does not help matters.

“An independent government would encourage more young people to come to Scotland to compensate for the demographic changes, but the fact is that jobs and prosperity really lie in London and the South East. The Yes campaign is living in a fantasy world if it’s promising better benefits in the event of independence.”

Industry comment
Richard Willets, director of longevity at enhanced annuity provider Partnership, said: “With a rapidly ageing population, logevity is steadily moving up the news agenda and the potential effect of any changes are becoming an increasing concern for government. Therefore, it is vital that this becomes part of the general discussion when independence is considered and positive steps are taken to deal with demographic challenges, such as the falling working age population.”


- Scotland’s working population will fall by by 3.5 per cent over the next 24 years, compared to a 5 per cent rise in England

- Number of active Scottish workers will fall by 2 per cent (compared to 6 per cent rise in UK)

- There will be 19 more babies born for every 1,000 women aged 30 - 34 in England than in Scotland