The significant gap in the government's 2025 Industrial Strategy  

But, unlike the 2017 strategy, which explicitly identified demographic ageing as a key challenge and opportunity shaping the UK’s future, this week’s strategy makes only passing reference to it. This is a significant gap.  

The UK’s population is ageing rapidly, with far-reaching implications for jobs, spending, public services, housing, transport, and the wider economy. In 2022, nearly one in five people in the UK was aged 65 or over; by 2072, this is projected to rise to more than one in four.  

This has implications for our country’s workforce but it also has implications for what our economy does: the services we offer, the communities, businesses and places we need to build.  

Ageing is not a future issue. It is a structural reality already reshaping our economy and society. By overlooking it, the government risks missing a major opportunity to drive innovation, unlock new markets, and future-proof growth.  The future of our economy is older and an industrial strategy that fails to recognise this will fail to deliver the growth ambitions that we all desperately share.  

The momentum the 2017 strategy generated is at risk  

The 2017 Industrial Strategy sought to position the UK as a leader in responding to the needs of an ageing population, not just by adapting the workforce, but by driving innovation across housing, health, transport, and technology.  

To support this ambition, the government introduced a £2.6 billion Challenge Fund, with several initiatives focused specifically on ageing. This included the Healthy Ageing Challenge, which aimed to help businesses tap into emerging market opportunities such as designing age-friendly homes, supporting independent living, and creating healthier, more active communities.  

According to UKRI’s 2024 impact report, the Healthy Ageing Challenge alone supported more than 240 projects, 230 events, and over 130 publications. However, the evaluation also suggests that the early progress made on this issue will not translate into long-term transformation without continued investment and strategic focus.  

Addressing our ageing workforce is key to the government’s growth ambitions  

One area where this is evident is the workforce. Employment rates for older workers have stalled since the pandemic, and current approaches have failed to reverse the trend.  

While innovation has a role to play, the bigger challenge is structural: the way work is designed, supported, and sustained across longer working lives. Without clearer direction from government, we risk leaving untapped talent on the sidelines and undermining the very growth ambitions the Industrial Strategy is aiming to deliver.  

The Industrial Strategy rightly focuses on sectors where the UK has high potential for growth, but younger workers alone won’t be enough to meet future demand. Analysis by the Standard Life Centre for the Future of Retirement shows that over-50s already make up 3.4 million workers in the strategy’s key sectors - around 31% of the workforce. But every year, an estimated 437,000 over-50s leave these sectors through early retirement, ill-health, caring responsibilities, redundancy, or job loss.  

This represents a huge loss of talent, experience, and productivity. In economic terms, that’s £31 billion in lost output each year. According to our own analysis, it accounts for at least £11.5 billion in foregone tax revenue for the government. That’s more than half the size of the UK’s oft-cited £22 billion “fiscal black hole”.  

In professional and business services, for example, the sector is expected to grow by around 570,000 jobs by 2035, but approximately 2.4 million people are projected to leave during the same period, meaning the overall replacement need could approach 3 million. Meeting that demand will require far more than new entrants; it calls for a stronger focus on retaining experienced workers and enabling mid- and later-life transitions.  

Similarly, clean energy industries are projected to generate up to 725,000 new jobs by 2030, yet employers are already reporting significant skills shortages. While some of this can be addressed by transitioning workers from oil and gas, the age profile of the current workforce is compounding the challenge: many of those with critical experience are approaching retirement or have already exited the labour market. Without a clearer focus on reskilling, retention, and later-life career support, these gaps will only grow.  

The challenge and opportunity of UK’s ageing population is here and now  

In April this year, the 50+ Employment Taskforce, a collective of organisations who champion the employment agenda for people in the 50s and 60s which includes the Centre for Ageing Better, called on the government to show greater ambition for the working lives of older people if it is to meet its manifesto pledge of an 80% employment rate.  

If we supported even half of the older workers currently leaving these sectors each year to stay in work longer, we’d be well on the way to meeting the Taskforce’s targets of 80% employment among people aged 50–59 and 55% employment among those aged 60 and over.  

The opportunity and challenges that comes with significant demographic change and a growing ageing population are regularly kicked into the long grass of politics and policymaking as too big an issue to deal with in the here and now. It is a key reason why the Centre for Ageing Better believes we need an independent Commissioner for Older People and Ageing to ensure this doesn’t happen.  

The government has shown an ambition to look forward in its policymaking by committing to long-term planning through the spending review alongside the upcoming ten year plans for health, housing and infrastructure and multi-year funding settlements for local authorities.  

The publication of the Industrial Strategy is more evidence that the government is trying to tackle the larger, systemic challenges facing the UK but overlooking the scale and immediacy of the ageing population challenge is an oversight.  

Across all eight sectors identified in the strategy, demographic change is not a future concern but a present reality. Harnessing the skills and experience of the older workforce must be central to any plan for long-term, inclusive economic growth.  

This article first appeared in the Financial Times