Amy McSweeney 18 June 2019

Regional inequality and later life

Last week, more than 30 newspapers or news websites based in the North of England published front pages calling on government to invest in the region, drawing attention to vast inequalities between London and the South East and other parts of the country.

Shortly afterwards, the Treasury Committee launched an inquiry into regional inequality. Our work at the Centre for Ageing Better suggests that this renewed focus on the issue is badly needed.

Looking at those in later life today, we know that where you live can dictate how long you’ll live, and how healthy those years will be – with truly shocking disparities within and between local areas.

Outside of the South East, a disability-free retirement is not currently a reality

In only 16 out of more than 150 local areas across England can both male and female babies born in 2015-17 expect to reach the age of 65 without a disability. 14 of those local areas are in the South East. These babies can, of course, probably expect to still be working at 67. At that point, in only six local areas are both anticipated to be disability-free. Five of those are in the South East.

Think about what this means. Today’s children have only a very small chance of enjoying a disability-free retirement – and almost all of those who will are from the UK’s wealthiest regions.

And these inequalities don’t just impact people once they’re retired but often lead to multiple disadvantages stacking up over the course of years. Disability is one of the primary reasons for leaving the labour market early, with significant financial consequences.

Falling out of work due to ill health means you won’t be able to contribute to an occupational pension and might reduce the amount of state pension you’re entitled to later on. And those in ill-health, in more deprived areas, rely most on their state pension in later life.

Regional economic imbalance means further inequalities in later life

Broader economic trends paint an equally bleak picture. The Treasury Select Committee has set up a new inquiry this week to investigate the regional distribution of economic gains and productivity. We know that being in work and earning enough to save is essential to helping people prepare for later life. Yet many of the jobs which would enable people to live a good later life are not where they live. A recent report by the Centre for Cities showed that rural areas and Northern cities are at the highest risk of job losses due to automation, with the strongest regional economies best protected. As it stands, half of all job growth is projected to be in London in the next 30 years.

This unequal job growth is increasing the amount of wealth held in property in the South East, and the financial benefits of this are not being felt equally, inside or outside the region, with increasing numbers of people can expect to spend their later lives in the private rental sector. This is not only a financial burden but also impedes your ability to plan for the long-term. It is difficult to ‘future-proof’ a home that is not your own or get important adaptations if your landlord is anxious they will lower the price of the property.

Home ownership rates are higher outside of London and the South East, but these homes are not necessarily fit for our ageing population either. More than a quarter of all owner-occupied homes in the North are in 'non-decent'. The cost of making all these homes suitable would exceed £7.8bn - nearly 40% of the estimated cost of improving all owner-occupied homes in England. The economic and social cost of our poor housing stock is being felt equally by private renters in the South East and low-income homeowners in the North.

Many more inequalities exist - outside of London and the South East, wages are lower and pay progression slower. Some of this is accounted for by the higher cost of living, but it is still the case that higher wages are associated with higher pension contributions. In 2015, the median private pension wealth of a household in the South East was £120,000 - over three times more than the median in the rest of the country.

We know that there are deep injustices in the way wealth is distributed across the country; we know that a person’s life chances are dictated to a disturbing extent by where they happen to be born. But much more attention needs to be paid to the implications of England’s regional polarisation for our ageing population and the quality of our later lives. Unless action is taken now, huge differences in wages as well as higher levels of deprivation and disability stand to make later life an even more unequal experience in the decades to come.

Amy McSweeney is evidence assistant at Centre for Ageing Better

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