Unlocking the value of the super-elderly
Ageing Articles

Unlocking the value of the super-elderly

Couple exercising

Singapore switched from an ageing population to an aged one in 19 years, a transition that outpaced most other societies in the world including South Korea and even Japan – the poster child of a greying population.

The demographic shift began in 1999. The proportion of residents aged 65 years and older reached 7 per cent, which is labelled an ageing population. By 2017, it doubled to 14 per cent – what the WHO calls an aged society.

Today, we are approaching a new phase with a rapidly growing group of elderly – the “super-elderly”. They are seniors aged 75 years and above.

In Japan, super-elderly residents already outnumber those aged 65 to 74. By 2025, there will be 50 per cent more of them than their younger counterparts. In Singapore, there are still 1.5 times more aged 65 to 74 than those 75 and above. But more will enter this super senior league soon.

This swelling ranks of seniors will pose a challenge to the economy. They are likely to slow the per capita gross domestic product growth by 1.5 percentage points every year until 2060.

This growing group, coupled with a low birth rate, also means a greater squeeze on the young who may have to pay more taxes to support the elderly. By 2030, the ratio of working age citizens supporting an elderly aged 65 and above will be 2.4, down from 8.4 in 2000.

But the super-elderly also represents a huge opportunity for society. Increasingly, they are staying healthy and productive longer. They tend to have more savings after years of working. They also continue to do what younger adults do – work, travel and stay active – giving rise to a “re-creation” industry where products are redesigned to appeal to this older crowd.

Changing healthcare

One of the greatest impact is healthcare, with rising costs and different types of care required due to the changing profile of the elderly.

This present cohort of super-elderly is made up of the generation before the country’s baby boomers, the youngest born shortly after the Japanese Occupation. Many grew up poor with little access to education, and do not speak English or Mandarin.

They tend to have lower expectations of healthcare, said Mr Christopher Gee, senior research fellow at the Institute of Policy Studies (IPS), who has done research on retirement financing and the healthcare costs for an ageing population.

“Healthcare for them is largely subsidised and they are happy with B2 ward and below,” he said.

But he believes this will change when about 1 million baby boomers, aged 54 to 71, enter the super-elderly demographic group in four years’ time.

The baby boomers grew up in more affluent times. This means they, as well as their children who had middle class upbringing, have higher expectations. Many will want to go for B1 wards and above or seek treatment at private clinics, driving healthcare costs up.

“The healthcare expenditure of the super-elderly will increase over time. While the Government has some measures to prevent medical cost inflation, the sheer demand will cause the price to rise,” added Mr Gee.

In fact, Finance Minister Heng Swee Keat expects healthcare expenditure to go up by at least $3 billion to an annual budget of around $13 billion from 2020, due largely to the growing number of seniors in Singapore.

Beyond rising healthcare costs is the need to ramp up new models of long-term care in the community.

The truth is: Singaporeans are living longer but their gains in healthy years have not quite matched up. On average, they still spend eight years out of 82 in ill health.

In fact, half of those who are healthy at the age of 65 can expect to become severely disabled later in life, according to the Ministry of Health. Among them, three in 10 are expected to live with their disability for more than a decade.

“The thing we really need is assisted living facilities,” said Prof Angelique Chan, executive director of the Centre for Ageing Research and Education at Duke-NUS Medical School.

“This could include home-based medical services that provide help with medication, vital signs monitoring, activities of daily living, and more social ones that help with daily living like grocery shopping and managing finances.”

Currently, there is a gap in the system, she noted. Home-based care has traditionally been provided by non-government organisations (NGOs), which rely heavily on volunteers, and the private sector, whose services are not so affordable for the low-income.

On this issue, the Government is moving in the right direction. It launched the integrated HDB development Kampung Admiralty, offering services such as those of a handyman or home medical and nursing care.

Other models are being studied, such as shared residences where three to four seniors live together and share common areas. They could also live with their families, with personal or home care services offered.

Silvering society offers a silver lining

While the focus on ageing tends to be rising healthcare costs and the impact of a greying economy, greater attention should also be paid on the benefits of longevity.

As more and more seniors are healthy enough to work longer, even beyond the current re-employment age of 67 years old, this means they remain productive longer, consume more, and will boost the economy.

This is what researchers have termed the longevity dividend – the economic benefits from slowing the ageing process.  

As Deputy Prime Minister Teo Chee Hean said in a IPS conference early this year: “Living longer does not mean being old for longer. It means staying young for longer. We need to keep fit, keep learning, and keep contributing.”

Indeed, as people live longer, mortality rates decline. In some ways, 75 could be the new 65  where 75-year-olds now have the mortality rates of past 65-year-olds. They may not be as feeble and frail as their predecessors.

“When we do our simplistic projections, we assume they are dependent, but they may not be,” noted Mr Gee. “Some of the future 75-year-olds will be able to help those in need.”

“There will be a huge amount of human capital potential and it will be a shame if we don’t tap that.”

To benefit from this longevity dividend means helping people to work longer. This requires companies to review retirement and focus policies on retaining and even re-training older employees for different job roles.

This will be a boon to the economy. For instance, calculations for Britain suggest that every one-year increase in working age is a permanent 1 per cent boost to GDP.

There will also be a boost for “grey” products and services that cater to seniors, but a more youthful version than before. This is because the growing elderly brigade will still want to continue travelling, exercising and doing the things they enjoyed in their younger days.

This presents an opportunity for companies to come up with products like travel tours that are more leisurely paced, gym memberships that require lower commitment, or even online courses that enables the elderly to pursue their passion.

Mr Gee added that seniors of the future will also have the benefit of accumulated savings, in the form of their CPF savings and home equity.

“I would say amongst the most rapidly ageing populations, Singapore is in a fantastic position because we have these savings and very few liabilities,” he added.

Despite the challenges super-elderly residents will pose on the economy and society, this silvering group will also add a golden sparkle by being healthy, active and key contributors to the nation.

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