UK's population would fall by 2030s without migration


Jamie Prentis
  • English
  • Arabic

The UK’s population would likely fall in the 2030s were it not for immigration, new data has suggested.

The Office for National Statistics projected a population increase of 3.2 per cent from the mid 2020s to the mid 2030s, or 67.1 million to 69.2 million.

That growth over the next 10 years will be driven by a net 2.2 million people migrating to the UK. In the decade to 2020, the population grew by 4.3 million, or 6.9 per cent.

In the next decade it is estimated there will be 59,000 more deaths than births, reflecting “an increasing number of older people as those born in the baby boom generations after World War Two and in the 1960s reach older ages”, the ONS said.

“These projections suggest slower growth than we’ve previously said. This is because of lower assumptions both about future levels of fertility and mortality improvements,” said James Robards, an ONS population and household projection statistician.

“Given a higher number of deaths and fewer births are projected, net international migration is expected to play an increasing role in population growth.”

In the UK in 2020 there were an estimated 1.7 million people over the age of 85 — or 2.5 per cent of the population. That figure is projected to nearly double to 3.1 million by 2045, which would represent 4.3 per cent of the population.

England’s overall population is forecast to grow faster by the mid 2030s (by 3.5 per cent) compared to Scotland (0.3 per cent), Northern Ireland (2 per cent) and Wales (2.6 per cent).

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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The specs
  • Engine: 3.9-litre twin-turbo V8
  • Power: 640hp
  • Torque: 760nm
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  • Price: Not announced yet
Updated: January 13, 2022, 10:00 AM