New UK population projections

Date : 12 January 2022

ONS has published new population projections for the UK. This is the first projection since 2018 and it offers an “interim” picture, pending arrival of fresh data from the 2021 Census.

Demand for food, drink and consumer goods is directly associated with population and so this data is essential for business planning. Data will also be used by government, especially for tax and spending projections.

Much has happened since the previous set of population projections, including completion of EU Exit, new migration policies and the COVID-19 pandemic.

The new projections are slightly more conservative than the previous iteration, predicting ongoing population growth, but at a slower rate than previously expected.

Total UK population is now expected to grow by 2.0m over 2021 to 2031, with England growing faster than other nations.

Net inward-migration will remain the major driver of population growth, accounting for about three-quarters of total change.

ONS assumptions for net inward migration remain broadly unchanged since 2018, implying that EU Exit is not expected to have any material effect.

This seems odd, given changes in government migration / work policies and the stated objective of reducing immigration by less-skilled workers.

Also, the projections do not appear to account for the possible future departure of EU citizens from the UK – more than 300,000 EU workers have left the UK labour pool since 2020, with no sign that they will return.

IGD is more pessimistic about future migration than ONS, anticipating that access to labour from overseas will remain very difficult. The ONS projection therefore seems optimistic, at least in this regard.

Assumptions for “natural change” (ie: births vs deaths) as a mechanism of population growth have changed more substantially.

The “fertility rate” (ie: the number of babies per woman) has been revised downward, to reflect the long-standing falling trend. Changes in life expectancy have also changed, to reflect recent slow-downs in progress.

These changes mean that deaths will gradually begin to match with births, as “Baby Boomers” begin to pass away, leaving migration as the key factor driving population change.

The number of people of “working age” (ie: 20-64 years) will remain more-or-less unchanged at around 39m until at least 2040.

The number of young workers (ie: 20-29 years) will fall slightly over the next few years, however. This may be an issue for businesses that aim to recruit trainees or apprentices.

Since the population will grow slowly, the level of “dependency” (ie; the number of non-workers per worker) will increase slowly – a challenge for government in particular.

IGD has previously noted that the size of the UK workforce peaked in 2021 and that, beyond this point, the number of people of working age will remain unchanged (best case) or decline slowly (worst case).

Nothing in the new ONS data contradicts this view. Businesses should therefore continue to focus on recruiting, retaining and developing workers.

More economic news and analysis

Sign up to our bulletin

Our round-up of the latest economic and political news, focused on FMCGs