What ageing populations mean for investors: Story in a slideshow

3 July 2026

How ageing populations are creating challenges, opportunities, and new investment themes

Rathbones Investment Management

Article last updated 3 July 2026.

Quick take

There will be fewer than two working-age people for every older person by mid-century, in wealthy countries.
The pension and healthcare costs will push up government deficits, inflation, and interest rates.
But there are plenty of opportunities for investors: spending will rise on products as varied as cardiovascular care, cat treats, and Easter eggs.

Please find the text for this slideshow's audio commentary below

When I'm 64...

In wealthy nations, there are now only about three people of working age for every older person. By mid-century, this ratio will drop to under two. Back in the 1950s, it was seven. This has massive implications for economies – and for investors, sometimes in surprising ways.

Our generation: The UK's fertility rate has fallen well below the replacement level of 2.1

A diminishing number of babies becomes an economic problem when it turns, a couple of decades later, into a diminishing number of workers. This economic problem is aggravated by the growth in life expectancy, one of the great triumphs of modern civilisation. That’s because governments have to tax a diminishing number of workers to fund the pensions of an increasing number of older people.

Take the UK. In the year the British group The Who released its classic song My Generation, the UK population’s generation – its production of children – was quite strong. The fertility rate – the number of children the average woman had over her lifetime – was close to three. By 2025, it was down just to one-and-a-half. The United Nations actually predicts a slight increase by 2050, although this view is hotly contested.

Not healthy for the public finances

This smaller pool of workers will also have to fund government spending on healthcare. That’s risen fairly steadily since the early twentieth century, apart from the temporary dip after the Covid pandemic ended. Ageing populations will force spending even higher.

All these pressures are already contributing to governments' widening fiscal deficits – the gap between their spending and their income.

That’s inflationary. Higher inflation could mean higher interest rates. That would raise corporate borrowing costs and hit company profits. And fiscal deficits could eventually reduce the price of government bonds by forcing down governments’ credit ratings.

Hope I get rich before I get old: India's fertility rate has fallen dramatically

In many developing countries, the fertility rate has often dropped even more steeply than in developed nations. For example, the average Indian woman now has almost four fewer children than in 1965. Developing countries with falling fertility rates face their own challenge, often summed up as the race to get rich before they get old. It could be harder for them to join the stratum of wealthy nations if they start to age significantly before they achieve this. One reason is that younger adults are more likely to start companies than older people. Another is that they’re usually more iconoclastic about accepted business practices. Both tendencies foster innovation.

The six spending ages of man - and woman

Older people also generally spend less. This is partly because their income tends to fall with retirement, and they typically become less active as they grow older. This lower spending could hit the profits of companies we invest in.

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A $10 trillion-plus market

These demographic pressures have contributed significantly to the expansion of global spending on healthcare – now above $10tn a year. That’s 10% of the total global economy. Ageing populations, therefore, present strong investment opportunities in the pharmaceutical industry. That includes companies leading in cardiovascular diseases and cancer. Companies leading the way in medical technology, such as hip and knee implants, will also do well.

Older people also buy more ground coffee and cat treats, but less makeup and sun cream

Sales will suffer for products for people with busy working lives, such as instant coffee. But other products will benefit from an ageing world – ground coffee, for example, for the discerning older person with time to spare. And older people are not only more likely to keep pets, as they seek companionship. They also commonly pamper their pets more. Taking the US consumer staples market as an example, spending on cat treats is higher in relative terms than any other category among older people.

So, ageing populations present some possibilities for investors. And they’re certainly good news for investors’ cats.

For more on what ageing populations mean for investors, see our special report: 'The longevity economy'

The longevity economy PDF

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