15 Fastest Aging Countries in the World

Published on April 26, 2024 at 11:41 am by Minal Zaheer in Lists, News

In this article, we will take a look at the 15 fastest aging countries in the world. If you want to skip our discussion on the aging trends, you can go directly to the 5 Fastest Aging Countries in the World.

According to projections by the United Nations (UN), the world’s population will reach 10 billion by 2050. This growth is accompanied by increasing longevity. As a result, the ratio of elderly people to working-age adults is expected to nearly triple, from 20 per 100 people in 1980 to 58 per 100 people by 2060. This trend of population aging is affecting all developed economies (OECD countries) but at varying rates. The global working-age population is expected to decline by 10% by 2060.

This trend will be most pronounced in certain countries. Countries with aging population problems include Greece, Japan, Korea, Latvia, Lithuania, and Poland. These countries are experiencing a decline of 35% or more in their working-age populations. This trend will place a strain on government pension plans worldwide. Hence, due to the aging population, countries worldwide are taking steps to make their pension systems more sustainable. Some of these steps include encouraging people to save, increasing retirement age, and limiting access to retirement funds beforehand.

With an aging population, the market for pension funds is also growing globally. In 2022, the global pension fund industry had a value of $64.1 trillion. Projections estimate it will reach $109.1 trillion by 2032, reflecting a compound annual growth rate (CAGR) of 5.5% between the years 2023 and 2032. Defined benefit pension plans dominated the market in 2022, holding roughly 75% of the global share. This dominance is expected to continue throughout the forecast period.

However, the defined contribution segment is projected to see the fastest growth, with a 9.0% CAGR from 2023 to 2032. Even though the largest market is North America at the moment, the Asia-Pacific region is projected to witness the most rapid growth during the forecast period. This is because rapid economic development and urbanization across Asia are leading to wealthier populations with a growing middle class. This segment is increasingly interested in retirement savings and investment plans. Major players in this market include Bank of America Corporation (NYSE:BAC), UBS Group AG (NYSE:UBS), and JPMorgan Chase & Co. (NYSE:JPM).

Bank of America Corporation (NYSE:BAC) is a global leader in financial services. It caters to a wide range of clients, from individuals and families to small businesses and major corporations. Recently, Bank of America’s wealth management division, Merrill, announced the launch of new investment options specifically designed for retirees. These options aim to provide a steady stream of income throughout retirement. Merrill utilizes strategies like “stable income” investments to achieve this goal. These investments prioritize consistent returns over high growth potential. Additionally, this product ensures retirees receive regular income payments by providing recurring distribution.

UBS Group AG (NYSE:UBS) offers various pension plan options for companies that then establish and manage their employee pension plans. Recently, Credit Suisse announced that it will integrate its pension plans with the UBS pension fund. Through this integration, both entities’ strengths will be combined, enabling them to expand the services they provide.

JPMorgan Chase & Co. (NYSE:JPM) is a global financial giant. It is the largest bank in the United States by assets and a leader in investment banking worldwide. JPMorgan Asset Management, which is a division of JPMorgan Chase, manages investments for a variety of clients, including pension funds. They offer investment solutions specifically designed to help pension funds grow their assets and meet their long-term obligations to retirees.

Recently, DBS Bank (DBS) has partnered with JP Morgan Asset Management (JPMAM) to launch a unique retirement planning tool in Singapore: DBS Retirement digiPortfolio. This innovative service goes beyond traditional investment options by offering two key features, namely automatic adjustment of risk based on age and automation of retirement income withdrawals based on needs.

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Our Methodology

To shortlist the 15 fastest aging countries in the world, we referred to data from the Organisation for Economic Co-operation and Development (OECD). This data includes estimates of the old-age to working-age ratio projected for the year 2052. The old-age to working-age ratio tracks the changing balance between generations. It’s calculated by dividing the number of people aged 65 and over by the number of working-age adults (typically between 20 and 64 years old), expressed as a ratio per 100. It is influenced by lifespan, birth rates, and migration. The countries are ranked in ascending order on the basis of this ratio, providing insight into how rapidly their populations will age in the coming years.

Note: We used OECD figures because its safe to assume that population is aging the fastest in developed countries. However, this OECD research also comprised countries like China.

You can also check out the 15 Countries with the Negative Population Growth in the World here.

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15 Fastest Aging Countries in The World

15. Lithuania

Demographic Old Age to Working Age Ratio: 56.8

Lithuania is one of Europe’s fastest aging countries. This trend presents a number of challenges, including a shrinking workforce and potential strains on social services and public governance. Currently, over 20% of Lithuania’s population is 60 years or older, with 15% exceeding 65 years. Data indicates a steady increase in the elderly population; in 2014, 18.4% of residents were over 65, compared to just 15% a decade earlier. While the elderly population grows, the overall population is shrinking. Projections for 2050 show a total population of around two million, with over half a million, or 28.5%, classified as elderly.

14. Slovakia

Demographic Old Age to Working Age Ratio: 56.8

Slovakia’s working population is expected to be reduced by about 20% in the next 30 years. This trend is projected to have a more significant impact on Slovakia’s economy compared to other EU countries, potentially hindering growth and living standards. In just a decade, the elderly population has grown dramatically, from 12.78% to a projected 17.05% by 2034. This translates to an expected increase in the number of people over 65 to 1.77 million. A European Commission report identifies Slovakia as one of the fastest aging countries in the European Union.

13. France

Demographic Old Age to Working Age Ratio: 57.1

France is currently facing a rapidly aging population, fueled by rising life expectancy and the arrival of the baby boomer generation at retirement age. This trend is particularly stark when considering the country’s post-WWII baby boom. Between 1946 and 1950, France witnessed an increase in births, exceeding 850,000 annually, with a peak of nearly 900,000 in 1949. Today, the demographic landscape has shifted dramatically. In 2023, over 26% of the French population, or one in four residents, are over 60 years old. Projections indicate a further increase to nearly one in three by 2040. This rapid aging presents significant economic and social challenges for France in the coming decades.

12. Estonia

Demographic Old Age to Working Age Ratio: 57.9

Estonia is a country by the Baltic Sea in Europe. Estonia deals with the issue of a shrinking and aging population, posing significant challenges for public services. Since gaining independence in 1991, Estonia’s total population has shrunk by 15%, reaching 1.32 million in 2019. This decline is particularly pronounced in rural areas, where a growing percentage of residents are elderly. This trend creates a double burden: a smaller workforce to contribute to public services and a rising demand for elder care and other social services. Estonia is at the twelfth position on our list of the fastest aging countries in the world.

11. China

Demographic Old Age to Working Age Ratio: 58.8

China has observed declining birth rates for decades and a corresponding rise in life expectancy. While China currently has a younger population than the United States and many other countries, projections suggest a significant shift in the coming decades. China’s aging is expected to surpass that of many Western European nations and the United States. The country’s elderly population (those 65 and above) is growing rapidly, currently at 15.4% and projected to reach 39% by 2050. This indicates that China’s aging process is outpacing most countries in modern history

10. Austria

Demographic Old Age to Working Age Ratio: 59.0

Austria is a small Central European country with a population of nearly 9 million people. In the past 20 years, Austria’s population has only gradually increased, which, along with a rise in the average lifespan, has caused an increase in Austria’s elderly population. Older individuals now make up a substantial portion of the population. Official statistics reveal that 19% of Austria’s 8.89 million residents are 65 years or older, placing it among the top five countries globally with this age demographic.

9. Germany

Demographic Old Age to Working Age Ratio: 59.1

Germany, Europe’s largest economy, also faces a rapidly aging population. This trend is driven by two main factors: low birth rates and increasing life expectancy. Since 2006, the percentage of Germans over 65 has steadily grown, reaching over 25% today. By 2050, this number is projected to increase by more than a third. This demographic shift has significant consequences. Eurostat predicts a critical strain on the workforce by 2040, with a ratio of less than two working-age people for every retiree.

8. Poland

Demographic Old Age to Working Age Ratio: 59.9

Poland’s population is aging rapidly. In 1950, the country’s median age was a youthful 25.8 years. However, this figure has since increased to 38.2 years and is projected to reach 51 by 2050. Every fourth person in Poland in 2022 was 60 years old or older. This old age population’s share is expected to increase in the near future.

7. Slovenia

Demographic Old Age to Working Age Ratio: 65.7

Slovenia, situated in Central Europe, faces a demographic challenge of a rapidly aging population, outpacing the European Union average. Between 1991 and 2023, the elderly population in the country has risen by 10.6 percentage points, rising from 10.8% in 1991 to 21.4% in 2023.

6. Portugal

Demographic Old Age to Working Age Ratio: 69.7

Portugal is a Southwestern European country situated on the Iberian Peninsula. Recent projections rank Portugal as the sixth fastest aging country globally. This demographic shift is driven by both increasing life expectancy and declining birth rates. Portugal has 182 individuals aged 65 and over for every 100 young people under 15, making it one of the fastest aging countries within the European Union.

Click to continue reading and see the 5 Fastest Aging Countries in the World.