Financial and Monetary Systems

People are living longer. So how can we build resilient economies and thriving societies?

Tackling longevity issues globally is difficult as every country has its own unique pension and retirement system.

Tackling longevity issues globally is difficult as every country has its own unique pension and retirement system. Image: Getty Images.

Haleh Nazeri
Lead, Longevity Economy, World Economic Forum
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Financial and Monetary Systems

This article is part of: World Economic Forum Annual Meeting
  • By 2050, the global population of individuals aged 60 and above is expected to reach 2.1 billion and many will outlive their retirement savings by between eight and almost 20 years.
  • The private sector and policy-makers must plan for the future development of their workforces' social programmes and health plans as people live longer.
  • A new report outlines six holistic principles to address the transformation that demographic change will bring to societies and economies and the need for increased public private collaboration worldwide.

As people live increasingly longer lives, a new framework and mindset is needed to guarantee that individuals can lead resilient, equitable and sustainable lives and to ensure that global societies can prosper and thrive amidst the changing global demographic landscape.

This new way of thinking includes focusing on longevity literacy, so that people can prioritize their health, purpose, and financial resilience as they live up to two decades longer than past generations. Businesses will need to consider how they will adapt their workforces and financial products. While nations will need to think about how they will support a changing demographic in the years to come.

Longevity Economy Principles: The Foundation for a Financially Resilient Future, a new report from the World Economic Forum, written in collaboration with Mercer, presents a set of six holistic principles that can be adopted by governments, business, and organizations to address the seismic transformation that demographic change will bring to societies and economies in the coming decades.

Image: OECD/INFE 2020 International Survey of Adult Financial Literacy.
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Why do we need longevity economy principles?

Tackling longevity issues globally is a difficult endeavour. Every country has a unique pension and retirement system. Nations also have a range of retirement ages, as early as 57 in some countries with different options for men and women, as well as blue- and white-collar workers.

The private sector has also been considering the challenges and opportunities of an ageing population, as well as the follow-on effects of a smaller workforce. Financial service companies have been attempting to help individuals save and invest their money as retirement systems continue to evolve worldwide. While other businesses have focused on topics such as healthy ageing, financial literacy, and caregiving.

These disparate and expansive topics needed a set of principles that business, government and societies can endorse to ensure the financial resilience of all generations amid diverse national systems and business priorities.

Six principles of the longevity economy

Over the course of 2023, a multi-stakeholder group of business leaders, finance experts, academics, health experts, and civil society leaders collaborated to create a set of principles to address the most pressing issues when it comes to longevity: financial resilience, health, ageism, purpose, and an equitable retirement system.

While these principles will not solve every challenge of an ageing demographic, it is a start, as well as a common language to bring the public and private sector together to help ensure the financial resilience of all generations.

1. Ensure financial resilience across key life events

Nearly 40% globally face financial instability after unplanned career interruptions, including career breaks, illness or unexpected retirement. Public-private collaboration is crucial to support individuals navigating these challenges.

2. Provide universal access to impartial financial education

Only 33% of the global population is deemed financially literate, contributing to wealth inequalities, strongly correlated with life expectancy inequalities. Comprehensive, impartial financial education empowers individuals to make informed financial decisions.

financial literacy around the world
Image: World Bank, S&P, GFLEC. Financial Literacy around the World.

3. Prioritize healthy ageing as the foundation for the longevity economy

Around one-fifth of life is expected to be lived with illness, and 80% of adults in developing countries are concerned with the cost of medical expenses. Equitable access to health services can facilitate well-being for both the individual and broader society.

4. Evolve jobs and lifelong skill-building for a multigenerational workforce

Internationally, up to 25% of individuals aged 55 and older wish to work in old age but face barriers in finding opportunities. Demographic shifts and technology innovations require jobs and skill-building to adapt and evolve, enabling individuals to extend their working years as desired.

5. Design systems and environments for social connection and purpose

Social connection is integral to healthy longevity. Socially isolated older adults have a higher risk of poor health and earlier death. Intentional design of systems and environments for social connection can mitigate these impacts

6. Intentionally address longevity inequalities, including across gender, race and class

Benefits of longevity are not distributed equitably. Advocacy for pay and pension equity, as well as support for informal caregivers, are some of the crucial elements to ensure that financial security and the benefits of longevity can be more accessible to all.

A collaborative endeavour for a global challenge

Different organizations have tried to promote each of these issues on their own, whether it is financial literacy, healthy ageing or multigenerational workforces. However, in order for societies and economies to truly succeed and help their citizens be resilient, all of these issues have to be tackled and addressed together.

Multi-stakeholder collaboration is critical, with business and policy-makers working together to enact real change. Join the dozens of leaders who are making the longevity economy a priority by committing to these principles in your business, community, and government.

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