We’re living in ‘VUCA’ times, says futurist and demographer Mark McCrindle. Thanks to the pandemic, technological change and demographic shifts in Australia’s population, things are “volatile, uncertain, complex and ambiguous”.

Prior to COVID-19, Australia’s net population increase was 230,000 per year. Border closures have hit net migration hard, and things aren’t expected to return to normal until the end of the decade.

Australia has also long passed its peak fertility rate. Despite this, there are more babies born now than at the peak of the post-war baby boom – about 300,000 births per year. Yet, young people are a smaller proportion of the total population. The fertility rate, says Mark, has dropped from 3.55 per cent in 1961 to 1.66 per cent in 2021.

This has major implications for the future of work, as well as the financial security new generations will need as they get older. By the 2030s, the midpoint in population will be hitting 40 years old, says Mark – a long way from the mid-20s from five decades ago.

“The point is that children born today can expect to live longer than their parents,” he says. “And that will continue to be the case into the future.”

Why Australians need a financial safety net

So, Australians will live longer, work longer and retire for longer. Mark says the retirement age, currently 67, could be pushed well into an individual’s eighth decade.

“We’ll see people working later because there’s a more expensive post-working life that [people] will have in terms of expectations, as well as longer years to sustain,” he says. “And it means dependents, spouses and partners and others in their world are also living longer and have greater needs.”

In addition to this, older Australians will have greater expectations regarding the quality of their later years. “Medical interventions, retirement services, spending money and upgrading the car will all come into focus,” says Mark. “Along with downsizing the house but improving the quality of that, these are all consumer cycles older Australians are moving through with increased frequency.”

All of this points to people needing a financial safety net, says Mark, creating an important impetus for financial planners to connect with customers to discuss their life stages and their insurance requirements.

Learn more about the Value of Life Insurance in this special MetLife Australia report and why cover needs to change as you grow.