Shocking UK statistic is an economic timebomb waiting to blow up in our faces

A recent projection from the Office for National Statistics should alarm us all. It found that the “replacement rate” – the term for the ratio by which women have enough babies to sustain population levels – stands at two to one. This means that a girl who turns 18 in the UK this year is likely to have just one child by the age of 35, leading to a continuing drop in the birthrate, which fell to an all-time low of 1.44 in 2023. We are such an ageing society that deaths are now outstripping births for the first time in half a century – and this is an economic crisis in the making.

We will be unable to sustain our ageing population if we do not have enough taxpayers and there will be more than 23 million over-65s by 2032, putting increased pressure on pensions, health, social care and other public services – and creating a demand for immigration to fill the gap. The problem is not confined to the UK. Birth rates have been declining across Europe for more than 50 years. In 2022 the total fertility rate (TFR) in the EU was 1.46 live births per woman, almost half of what it was in 1960.

I use the phrase “political infertility” to describe this crisis because it has been caused by policy decisions that prevent fair and equal access to assisted reproduction services, or create socio-economic conditions that deter couples from starting a family. Failing to address the causes of population decline is therefore a political decision. This is not an insoluble problem.

A European Economist Impact report, to which I contributed as the UK medical expert, conducted an evidence-based review of global papers analysing the impact of family-friendly policies in order to address the issue. Let’s start with access to fertility treatment. One in seven UK couples have difficulty conceiving, but the postcode lottery means that only 27% of IVF cycles are NHS funded, falling from 40% a decade before. Just three out of the NHS’ 42 Integrated Boards (ICBs) provide the full three IVF cycles for women under 40, as recommended by health guidance body NICE (National Institute for Health and Care Excellence).

We need to make IVF accessible and affordable to all, including single women and same-sex couples, so that they don’t have to self-fund. Currently, more than half of ICBs require same-sex couples to pay for 6–12 cycles of artificial insemination before being eligible for IVF.

Infertility is classified as a disease by the WHO and access to treatment should be a medical right. But fertility is also a family issue, not solely a medical one. Our review of the global research showed that family-friendly policies, which promote gender parity, are the most effective solution. They need to be at the forefront of policy making.

While there may have been a generational shift in personal preferences towards having fewer or no children, many individuals and couples say they want to have more children than they currently do, indicating a significant "fertility gap" between aspirations and reality. But the financial deterrents are obvious. House prices continue to rise, with the average cost of a home now around £269,000, and much more in some areas. In the UK, the cost of raising a child to age 18 is now £260,000 for a couple and £290,000 for a lone parent.

The UK is the fourth most expensive country in the world for childcare, with costs accounting for 19% of income. Research shows that the availability of childcare is the single most effective factor to improve the fertility rate, alongside longer and higher-paid maternity leave.

We cannot expect couples to create families if we do nothing to ease their financial burden. We need a joined-up approach with long-term thinking on this matter. Policymakers and employers both have a role to play, bringing more flexibility to the workplace. Statutory maternity pay covers up to 39 weeks while statutory paternity leave offers only two weeks – the least generous in Europe. Only 1% of eligible mothers and 5% of eligible fathers or partners have taken up shared parental leave – largely due to financial reasons. Meanwhile, only 11% of employers offer childcare benefits.

In Spain, a lump-sum maternity allowance benefit led to a 3.5% increase in births – but when the benefit was scrapped, they fell by 5.7%. In Austria, increasing parental leave from one to two years increased fertility by 3.5% with more mothers choosing to have a second child.

There are short-term costs to absorb, but the long-term economic benefits far outweigh them. Research has shown that an infant born in the UK contributes nearly £700,000 to the economy during their lifetime.

This is not a quick fix. We need a long-term perspective and cross-departmental approach when designing and implementing family policies, recognising that changes in fertility rates may take decades to have an effect in broader society. We need to teach our children about fertility in schools to educate the next generation.

But this is not an optional extra – a “nice to have”. It is an economic imperative.

Professor Geeta Nargund is Lead Consultant in Reproductive Medicine, St George’s Hospital, and Founder of Create Health Foundation