Increase of 167,000 People Per Year Over The Next Twenty Years
Much Lower Projected Growth Than Previous 2018-Based Projections
Higher Net Migration Not Enough To Offset Negative Natural Change
4.5 Million More People Aged 60+ by 2040
The latest ONS population projections show continued population growth across the UK though at a much lower rate than in the previous 2018-based projections. The new 2020-based interim projections show an increase of 167,000 people per year over the next twenty years. However, this reflects much higher growth during the first five years (245,000 p.a.) than the following fifteen years (141,000 p.a.) as net migration is projected to fall slightly and natural change (births less deaths) is projected to turn negative from 2025.
As Figure 1 shows, these latest interim projections continue the trend of lower growth since the 2008-based projections. Figure 1 also highlights the challenges in projecting future population changes. Recent trends are not always indicative of what will happen in the future and even when we appear to get it right (e.g. 1975), it’s not always for the right reasons. The 2020-based interim projections are particularly subject to uncertainty given the unknown impacts of the pandemic. The release of 2021 Census data should improve the next version of population projections (2021-based) due to be published in 2023.
The new 2020-based projections project lower total population growth than the previous 2016-based and 2018-based projections. Net migration is expected to be higher in the latest projections with 4.2 million people over the next 20 years compared to 3.9 million in the 2018-based projections. However, the latest projections are based on a much lower number of births and slightly higher number of deaths. The net result of this is a negative natural change (-0.9 million compared to 0.7 million). The overall impact of the slightly higher net migration projection and negative natural change projection is to reduce the total change over the next 20 years by 1.3 million people.
The ageing population is a massive challenge for not just the housing market but also society as a whole. The new 2020-based interim projections show that the number of people aged 60 and above is expected to rise from 16.4 million in 2020 to 20.9 million in 2040 (Figure 3). While this is a massive 28% increase (4.5 million people), most of them are already housed appropriately. The biggest challenge will be in balancing their care needs against the housing needs of younger and typically less wealthy generations.