Discover the Surprising Advice Actor Andrew Scott Has for Investing in Your Future Self!

This is part of a series, ‘Economists Exchange’, featuring conversations between top FT commentators and leading economists

It isn’t easy to grow old gracefully — as many ageing countries are beginning to find out. In France, people have taken to the streets to protest against a rise in the state pension age. In Germany, the government is pushing through a major liberalisation of its immigration system because employers are “desperate” for staff and the country will “lack 7mn workers by 2035 if we don’t do something”, as the labour minister has put it. Meanwhile, rating agencies are warning that ageing populations are hitting public finances across the world.

But Andrew Scott, a professor of economics at London Business School, thinks his profession can be too gloomy about ageing. What matters, he says, is not how long people live, but how well they age, and that is something which can be changed. Much of his career was focused on monetary and fiscal policy before he became fascinated by demography and co-authored with Lynda Gratton the book The 100-Year Life in 2016. He will publish a new book on longevity next year.

In this interview, he discusses how governments and individuals can best navigate a world in which people are living longer lives, from questions over the state pension age to health policy, falling birth rates, flexible work and a four-day week.

Sarah O’Connor: When economists talk about ageing, they often talk about it in quite gloomy terms. We hear about “dependency ratios” or the “demographic time-bomb,” as if this is a terrible thing that’s coming towards us. Do you think they’re being too miserable?

Andrew Scott: I used to give a lecture about the ageing society — the normal doom and gloom of economics. There are more old people. Old people don’t work. They get ill. They need a pension. And it was a remarkable way of turning one of the greatest achievements of the 20th century into a 21st-century problem. We had fewer children dying. We had fewer parents snatched away in mid-life. More grandparents meeting grandchildren. Economists are now saying this is a big problem.

Strangely with economics, we just focus on a chronological concept of age. But there are two other key concepts of age. One is prospective age, which is how many years you’ve got to go. And if you think in simple economic terms, someone who is 50 with a life expectancy of 70 is very different from someone who is 50 with a life expectancy of 90. You have more incentive to invest in your future.

Then, the other concept of age is biological age, which is just your health and how you’re ageing, and that’s very malleable. We can influence how we age and we can see that in a variety of ways. We’ve all got friends who look good for their age. We all know if we eat better and exercise more, we age better. Then, there are huge social inequalities, which show us that ageing is something that society can influence.

So, if you look at it from that longevity point of view, not in terms of time passed, but in terms of time to go, and the malleability of age, we can make the most of these longer lives and seize an advantage, but we have to focus on changing how we age. Whereas the ageing society story just looks at changes in the age structure, which is why it is kind of miserable.

What we’ve really done is just slow down dying but we haven’t slowed down ageing. We keep people alive for longer but we’re not keeping them healthy. We have to switch much more towards preventative health

For me, the real lightbulb moment was when I was working on an economic paper where you just see the probability of the young and middle-aged becoming old is now very high.

In the latest UK ONS data, there’s a 50 per cent chance that a child born today will live to be at least 92 to 93, and that’s never been the case before. And, of course, if you now have a majority living into their nineties, rather than a minority, then you, yourself, have to invest more in your future. As a society or as individuals, we’ve never had the expectation of living into our 10th decade, and so we’ve never invested. And that’s what we have to do. We have to invest much more in our future selves.

SO’C: How do we do that? What are we not doing that we should be doing, or what are we doing that we should stop doing?

AS: I think the real problem we’ve got is that we’re not investing in the things that matter from mid-life onwards. That’s obviously around health and around productivity and skills.

Health is a major problem, because we have a health system based around intervening, and intervening when you have age-related diseases is not good. It doesn’t maintain health. A number of people say that what we’ve really done is just slow down dying but we haven’t slowed down ageing. We keep people alive for longer but we’re not keeping them healthy. So, we have to switch much more towards preventative health.

SO’C: What does preventative health look like? Does it look like more investment in public health and education, or are you thinking about more structural things, like taxes on sugar and salt?

AS: I think it has to be all of the above. I think there’s a whole, let’s call it “longevity literacy” — making people aware that they’re going to live longer than past generations and these are the things that you can do to age better. Of course, we’ve made enormous progress in reducing cigarette smoking and alcohol, and I suspect we’ll see similar things around salt and sugar, and that may be to do with taxation, it may be to do with support programmes to help people change, as well as advertising information.

Then, there’s the healthcare system where we’ve just got to put a much bigger focus on prevention. That, of course, involves a big shift of the health system out of hospitals into the public, into the community, so a much more distributed focus. It’s a very big change in what we’re required to do.

The way most governments are approaching the state pension age is purely looking at the issue of pension solvency. But it doesn’t tackle the fundamental problem, which is can someone work for longer? Have they got the health and skills and employment opportunities?

Then, I think there are issues around the pharmaceutical sector because right now there’s a bias in drug development towards drugs that deal with end of life. We’re prepared to pay a lot of money to give us a little bit extra at the end of life. We’ve got to try and give better incentives to focus on healthy life expectancy drugs, rather than just those that give us a few more months at the end, and that will require, I think, some big changes.

SO’C: We started by talking about how life expectancy is rising, but in the US and the UK, it seems as if that trajectory has started to change. I wonder if you could talk a bit about how that compares to other countries?

AS: You’re absolutely right that US and UK trends are stalling and, in fact, possibly going into reverse. And I guess the first thing to say about that is that’s terrible. There’s a concept called best-practice life expectancy, which is the country with the highest life expectancy at birth. In 1980, US life expectancy was around one year below the average of high income countries. Now, it is around six years lower.

The fact that China now has higher life expectancy than the United States, despite the fact the US has six times higher GDP per capita is, I think, just shocking, terrible.

So, it’s a problem and I think it’s also a more complicated problem because actually, if you look in more detail, although average life expectancy is stalling, a lot of that in the US is due to their terrible deaths of despair, their rising mid-life mortality. If you look at life expectancy at 65, it has continued to increase. And so life expectancy, of course, is still rising for many people, so you’ve still got a lot of inequality. You’ve got that and then, of course, in the richest countries you’re seeing life expectancy trends begin to slow down. So, rather than run at about two years every decade, the increase is about one year every decade.

SO’C: I wonder what you think the implications are for the state pension age, which obviously has been linked to life expectancy. But is that the right thing to link it to, do you think?

AS: I don’t think it is. I think one thing that frustrates me about the whole debate around state pension and age is it’s not really tackling what I would say is the main challenge. I think the way most governments are approaching the state pension age is purely looking at the issue of pension solvency. If I can make people work for longer, or I delay giving them a pension, it’s one less year of paying a pension, and potentially one more year of tax. But it doesn’t tackle the fundamental problem, which is can someone work for longer? Have they got the health and skills and employment opportunities?

We need to get much better at intergenerational connectivity, because when we talk about things like baby boomers and Gen X we are already setting things up for a zero-sum game, a battle for resources

That’s why, for all the political heat governments face trying to extend the state pension age, there’s this sort of open goal waiting between 50 and 65, or whatever the state pension is. In the US, if you could get 50- to 65-year-olds working as much as 45- to 49-year-olds, that’s another 8mn workers, that’s another 5 per cent to GDP, and that’s your economic problem solved.

SO’C: From a policymaker’s point of view, everything you’ve said might make sense to them, but they’re still presumably going to fret about the demographic structure of their societies and falling birth rates. We’ve started to see this pronatalist vibe in some countries now and I wonder, as someone who focuses on economics and demography, what you think of that debate?

AS: I’m sort of glad to see it because I think the ageing society story is often reduced to “there’s too many old people” but it’s also about there being, I think, too few young people.

So, the question is why have we got this fall in the fertility rate and should we do something about it? Now, how many children to have is a deeply personal decision and, as you can see, there are deep-seated structural reasons why the fertility rate has fallen so low. But in most countries it’s below their replacement rate now so, without immigration, populations are going to decline.

Now, that could be good from an environmental point of view. It could be good for the child, but it leads to a whole bunch of issues. The first is within society we have to get much better at intergenerational relationships because when I was young there were loads of people, my cousins my age, that I hung around with, but now there’s not. And so we need to get much better at intergenerational connectivity, which is an interesting challenge because when we talk about things like baby boomers and Gen X we are already setting things up for a zero-sum game, as a battle for resources.

But then I also worry about the unsustainability of low fertility rates. So, I think we should look at whether if we made it easier to have children we’d have more. That’s my view. But it’s hard to see how economic incentives can really shift the dial.

I think, for me, this is the other really interesting prospect of a longer life. In the 20th century we saw a lot of leisure happening after retirement. I think we’re now going to see the retirement age increase. We’re going to see more leisure taken this side of retirement, and if we can find ways of flexible work, that should do wonderful things for making it easier to raise a family. I would say if we’ve got longer lives and we can make them healthier, we’ve got more time, and that’s not just time at the end of life, it’s time to be used across life, and that is how we can perhaps try and tackle this challenge of fewer children being born.

SO’C: So work for longer, but work a bit less hard, or do fewer hours?

AS: Or more flexibly. It could be a four-day working week. We know we’ve gone from six-day, five and a half, five and we may go to four. But there are certain times where you might be working flat out because you’re in need of the money or whatever it might be. Other times you might be working more flexibly.

Certainly, if you look at what supports older people to carry on working for longer, it’s flexible work. And I’ve done some work with Daron Acemoğlu and Nicolaj Mühlbach on what makes a job age-friendly. Age-friendly jobs are ones where there’s a lot of flexibility around time. You have a lot of autonomy. It’s not physically demanding and there’s flexibility and, of course, everyone likes those jobs. But older people like them in particular.

You’ve got to try and think, what would I like in the future? You’re going to want to be healthy. You want to have some money. You want to be in a good relationship. And you want to have options about other things to do

If we create a more flexible working environment then we will, over our life, be able to get this better balance because if we are making careers longer, I don’t think we can keep working in the same way. If we need to be productive for longer, we’re going to have to have a more flexible map of how we do our career and when we work hard, when we take time off. So, it could be the little breaks, like I’m taking Monday off, or it could be that career break where you learn a new skill or take time out to raise a family or to care for your parents or whoever you’ve got at home.

SO’C: You could argue that employers have already just made a massive adjustment since Covid with the growth of hybrid work and working from home.

AS: Age-friendly jobs have increased enormously in number. I’m not saying that’s by design. I’m not saying employers said, “Oh, we must have more age-friendly jobs”, but the nature of work has changed with certain sectors growing faster than others — so construction and manufacturing growing less fast than the service sector — and technology has made it easier to work flexibly and autonomously. So, we’ve already seen a very big increase in age-friendly jobs, although it depends which sector you’re in whether you benefited or not and it depends on your education.

SO’C: Presumably there are more age-friendly jobs in the graduate, professional end of the spectrum?

AS: Exactly. If you look at older graduate employees, they’re doing really well. They can carry on working if they want to carry on working. They’re in a good job. They’re in a senior management position. Actually, it’s working quite nicely for them. But, say in the US, we found if you’re a male, non-college graduate then you’re perhaps working in construction and manufacturing. That’s not a very age-friendly job. It hasn’t become much more age-friendly and the chance of working for longer is, therefore, hard.

SO’C: And your healthy life expectancy might also be shorter.

AS: Totally. Therefore, we need to help people make those jobs more age-friendly, and there are ways of making the manufacturing sector more age-friendly and actually many firms are doing it because they tend to have a very old workforce. So, Japan and South Korea are investing lots in robotics. You slightly slow down the production process. You make the chairs easier. There are a whole bunch of issues here. But we probably will have to accept that you’ll need to transition into different jobs at different points of time.

SO’C: On an individual level, what are the key changes you can make in your own life? I’m in my thirties. What should I be doing now to make sure I’m healthy when I’m in my eighties?

AS: This is where it gets really, really hard because longevity is about all of life, and it’s really hard to be prescriptive about all of life and people’s circumstances differ enormously. But the key thing is that you need to think more of your future self, because you’ve got more future to come, so you need to be a bit more friendly to your future self.

And so you’ve got to try and think, well, what would I like in the future? And I think that’s actually relatively simple to think about. You’re going to want to be healthy. You want to have some money. You want to be in a good relationship. And you want to have some options about other things to do. And it’s those simple, basic things. There’s a whole bunch of other longevity hacks like eat one meal a day and make sure it’s purple and make sure it’s green and all that sort of stuff, but I would say it’s more the old-fashioned hacks that work well.

Once you start thinking about what makes a good life, and how can you make it better and longer, it’s hard to think of anything else

I think the key years are probably around 40 and 50 because I know lots of people who think they’re going to carry on working to 65 or beyond, but then they lose their job in their fifties because of ageism or because they’re seen as being expensive. Then, suddenly, in their fifties, it’s like, oh, how do I keep working? And it’s hard because there’s prejudice about employing older workers. You have to learn new skills, do something different. So, investing in avoiding that situation I think is key.

I also think a really big issue of preventative health is around the menopause because it is a key part of determining a woman’s future health. It also has a big impact on many people in terms of whether they can carry on working and it’s a really under-resourced and under-acknowledged issue, both in the workplace and in the health system.

SO’C: As an economist, are you seen as slightly unusual because you’ve developed this interest in demography? How did that come about?

AS: Most of my career I’d spent looking at monetary and fiscal policy and I guess I was, what, late forties and, to be blunt, I was just bored talking about whether interest rates are going to go up or go down again. So, for my own longevity I needed variety and I needed change. Then, you look around. I guess my mother might have just died. You see your children behaving differently from you. And you think, well, why aren’t we changing how we age? Then, of course, once the penny drops you become obsessed with it.

Robert Lucas, who has sadly passed away, said that once you start thinking about economic growth, it’s hard to think about anything else. Well, once you start thinking about what makes a good life, and how can you make it better and longer, it’s hard to think of anything else. There’s few things as important.

The above transcript has been edited for brevity and clarity