Key policy considerations for the UK's ageing population

With an ageing population in the UK, a general lack of housing supply and stretched social health and social care systems, it is becoming increasingly important to consider the housing, support and care options available for older people in the UK and the shape of policy around these.  

Housing

Housing remains high on the Government agenda, with Labour committed to delivering 1.5 million homes in this parliament as part of its "Get Britain Building" philosophy. While this is an admirable goal led by shouts of "shovels in the ground and cranes in the sky", there is still a strong focus on delivering housing for first time buyers and helping them fulfil the British dream of home ownership. That is of course an essential part of the overall housing delivery need for the UK. However, it is important to step back and think about what kind of housing is going to be built to enable better outcomes for everyone in society. A key point here is that 80% of the 30 million or so residential dwellings in the UK will still be here in 2050, with only 20% of the total housing stock at that point being built between then and now, we have to focus on where best to deliver that new stock.

The International Longevity Centre's 2022 Mayhew Review on future proofing retirement living suggesting that the delivery of newbuild retirement homes should be dramatically raised, potentially to 50,000 units a year. This would be something like a seven-fold increase compared to current supply, which demonstrates the scale of the opportunity, and aligns to the ARCO vision for 250,000 people to have the opportunity to live in IRCs by 2030. Bearing in mind the changes in demographics over the course of the next 20 years, with the Centre for Ageing Better indicating a 30% increase in over 65s and a doubling of the over 80s cohort to six million people, and taking into account that market penetration for specialist older people's housing products in established international jurisdictions is around 15%, even this level of delivery is arguably not going to be enough.

In principle, building specialist older people's housing which is attractive, financially viable for those building it, operating it and – crucially – living in it, creates a flow down benefit to housing supply. This was highlighted by L&G in its Last Time Buyer's report as long ago as 2015, noting that there were at that time 3.3 million homeowners aged over 55 and looking at future downsizing options, occupying homes with 7.7 million spare bedrooms - the equivalent of 2.6 million family homes. If anything the position will have been exacerbated in the near decade that has since passed, but persuading one in eight of those people to move to a new specialist housing setting could deliver a full year of the Government's proposed 1.5 million homes. 

So the question perhaps is where should Government policy focus to meet the total housing need, and could focusing on older people solve current and future housing challenges for them while also solving them for everyone else in the housing supply chain, including first time buyers?  

Health and social care 

This is another stated focus of the Labour Government, which wants to ensure the NHS is focused on prevention not just treatment, and to see care provided in community settings as close to people's homes and support networks as possible. NHS reform is an ongoing political challenge – Labour's pre-election commitments suggested a move away from previous "sticking plaster" funding announcements, but the Budget saw a further £22.6bn of funding applied – which sounds substantial but is not likely to make a material difference to health infrastructure with the majority focused on the (also important) NHS workforce plan. Structural reform of the places in which care is provided would require firstly addressing the £14bn or so backlog maintenance bill facing the NHS estate, and secondly a funded programme to revitalise that estate to reflect the commitment to focusing on care in the community. 

Meanwhile, the social care system remains a means tested user-pays system, in contrast to the NHS, something that Labour is also finding a tough challenge. Reforms proposed by Andrew Dilnot over a decade ago to place a cap on lifetime care costs have been repeatedly delayed, most recently by Rachel Reeves this summer. There is potentially a Royal Commission on social care reform to come – which could build some cross party consensus but will continue to elongate timescales for delivering change around the issue of funding this sector. Meanwhile social care too has challenges around staff recruitment and retention, contributed to by the low pay and often low esteem in which workers face in the sector.

Retirement living is one part of the wider solution to many of these issues: offering service models which are more efficient in the delivery of support than traditional domiciliary care; show a growing evidence base of reducing demand – and cost, potentially to the tune of billions – for already stretched NHS and social care services; meet the goal of community care; and also address structural issues such as NHS delayed discharge (bed blocking) by providing safe community based routes for those exiting acute care settings.

Integrated thinking and integrated retirement communities 

The People at the Heart of Care: adult social care reform white paper makes the observation that every decision about care is also a decision about housing. The two are inextricably linked and this is particularly the case when looking at housing options for our growing older population.

The policy questions raised here open up a whole host of discussion points around topical policy areas, all of which have been key talking points in the sector for some time, such as the way the planning system operates when applied to the sector and whether both policy and specifics like use classes could be adapted to further enable it; whether tax or other incentives should be offered to older people to encourage them to move and free up potential family housing; growing consumer understanding of the available products in the IRC and wider retirement market; sector regulation to grow confidence in the sector and reduce the risk (and the costs) across investors to operators and customers; the best approach to occupancy arrangements – particularly in light of the Government's stated intention to end leasehold; the ideal financial and services proposition to make to customers.

None of these require great swathes of public money to simulate the sector, just some bandwidth from Government to create some enabling change to policy and regulation. The recently published Older People's Housing Task Force report highlights many of these issues and ideas for working through them – but that is a discussion for a later article!