Demographic Pulse: The price of our long lives

Long life expectancy and aging societies are either already a reality or soon will be in many countries. The proportion of over-sixties in the German population, which currently stands at around 26 percent, is set to increase to around 40 percent by the middle of the century. The positive development of longevity is the result of enormous social, medical and social progress. But longevity also comes at a price. By 2060 state expenditures for pensions, care and health will make up just under 30 percent of the gross domestic product in the Eurozone. Germany is close to the average EU level at 28.4 percent. To put this in perspective, the expected cost increase for Europeans due to the explosion of age-related state spending alone would consume the current economic output of the Netherlands, according to a recent Allianz Demographic Pulse study. "Aging worldwide is a structural trend with potentially dramatic social and economic consequences, both for state budgets and for individuals," says Alexander Börsch, Senior Economist International Pensions at Allianz.