Pakistan's Ageing Population 2026: Elderly Care, Pension Gaps, and Demographic Shift

Pakistan's Ageing Population: Elderly Care, Pension Gaps, and the Coming Demographic Shift

Pakistan, often characterized by its youthful demographic profile, stands at a critical juncture. While the nation still benefits from a substantial youth bulge, the underlying demographic currents indicate a profound shift towards an ageing population. According to the Pakistan Bureau of Statistics (PBS), the population aged 60 and above constituted approximately 7.5% of the total population in 2023, a figure projected to nearly double to 15% by 2050, as per United Nations (UN) estimates from 2019. This transition, though slower than in East Asian economies, is accelerating, presaging a future where the demands of elderly care and the sustainability of pension systems will become paramount national concerns. The conventional wisdom that Pakistan is a perpetually young nation is increasingly being challenged by these projections, foregrounding an urgent need for policy recalibration. The implications extend beyond mere demographics, touching upon public health, social protection, economic productivity, and intergenerational equity. This article interrogates the multifaceted challenges posed by Pakistan's ageing population, examining the existing gaps in elderly care and pension provisions, and proposing a strategic way forward to navigate this inevitable demographic transformation.

Context & Background

Pakistan's demographic trajectory has historically been characterized by high fertility rates and a large proportion of young people. However, declining fertility rates, coupled with increasing life expectancy—which stood at 65 years in 2022 (World Bank)—are gradually reshaping this profile. The demographic dividend, a period where the working-age population outnumbers dependents, is still active but is maturing. This means that while the proportion of young dependents is decreasing, the proportion of elderly dependents is set to rise significantly in the coming decades. This shift is not accidental; it is the natural consequence of improved healthcare, sanitation, and reduced child mortality over the past half-century, a testament to development, yet simultaneously a harbinger of new challenges.

The traditional social safety net in Pakistan has predominantly been the extended family system, where elders are cared for by their children and relatives. This informal mechanism, deeply embedded in cultural and religious values, has historically attenuated the need for robust state-sponsored elderly care. However, rapid urbanization, changing family structures, economic pressures, and the increasing migration of younger generations for work are eroding this traditional support system. The causal chain here is clear: urbanization leads to nuclear families, which in turn reduces the capacity for multi-generational care, thereby increasing the vulnerability of the elderly. This is not merely a social observation; it has profound policy implications, as the state's historical reliance on informal care is becoming unsustainable.

The formal pension system in Pakistan is fragmented and largely inadequate. It primarily covers government employees and a small segment of the formal private sector through institutions like the Employees' Old-Age Benefits Institution (EOBI). The International Labour Organization (ILO) reported in 2020 that only about 7% of Pakistan's total workforce is covered by any formal pension scheme. This leaves the vast majority, particularly those in the informal sector (which constitutes over 70% of the workforce), without any social security in their old age. The existing schemes often operate on a 'pay-as-you-go' (PAYG) model, which becomes fiscally strained as the dependency ratio shifts from young to old. The implications are uncomfortable: a growing number of elderly citizens will face economic insecurity, placing immense pressure on an already fragile public health system and potentially exacerbating poverty levels. For a deeper dive into Pakistan's fiscal challenges, see our CSS/PMS Analysis section.

Core Analysis

The impending demographic shift presents a dual challenge: the increasing demand for specialized elderly care and the fiscal strain on an already underfunded pension system. The World Health Organization (WHO) emphasizes that ageing populations require comprehensive, integrated care models, focusing on non-communicable diseases (NCDs) like diabetes, cardiovascular diseases, and cancers, which are prevalent among the elderly. In Pakistan, public health expenditure remains alarmingly low, at approximately 1.2% of GDP in 2022 (World Bank), significantly below the WHO-recommended 5% for developing countries. This structural constraint means that the existing healthcare infrastructure is ill-equipped to handle the complex and chronic health needs of a rapidly growing elderly cohort. The causal chain here is that low public health spending leads to inadequate geriatric facilities and trained personnel, which in turn results in poor health outcomes for the elderly and increased out-of-pocket expenses for families.

The pension gap is another critical area. The EOBI, established in 1976, provides old-age benefits, invalidity pensions, and survivors' pensions to insured persons. However, its coverage is limited to formal sector employees, and the benefit amounts are often insufficient to meet basic living costs, especially given inflation. The system's sustainability is further problematised by a large informal sector and a relatively young contributor base that will eventually shrink proportionally. The comparative record qualifies this: countries like India and Bangladesh, while also grappling with large informal sectors, have experimented with universal basic income schemes or more inclusive social pension programs, offering valuable lessons for Pakistan. For instance, India's National Social Assistance Programme (NSAP) provides non-contributory pensions to the elderly poor, a model Pakistan could adapt.

The UNICEF, while primarily focused on children, also highlights the intergenerational impact of social protection policies. A robust social security system for the elderly indirectly benefits children by reducing the financial burden on working-age adults, allowing them to invest more in their children's education and health. Conversely, a weak system can force younger generations to divert resources from their own families to support ageing parents, perpetuating cycles of poverty. This second-order effect is often overlooked in policy discussions. The Ministry of National Health Services, Regulations & Coordination in Pakistan has acknowledged the need for geriatric care, but concrete, scalable programs remain nascent. The challenge is not merely one of resource allocation but also of institutional capacity and coordination across various government tiers and departments.

"Pakistan's demographic transition, if unaddressed, risks transforming a potential demographic dividend into a profound demographic burden, challenging the very fabric of its social and economic stability."

Pakistan-Specific Implications

The implications of Pakistan's ageing population are far-reaching and complex. Economically, a larger elderly population, if not adequately supported, can reduce national savings, increase healthcare costs, and potentially slow economic growth by diverting resources from productive investments. The current pension system's limited coverage means that a significant portion of the elderly will rely on intergenerational transfers, which places an increasing strain on the working-age population. This can lead to a 'sandwich generation' caught between supporting their children and their parents, impacting their own economic mobility and well-being. The challenge is compounded by Pakistan's high youth unemployment rate, which further attenuates the capacity of the younger generation to support their elders.

Socially, the erosion of traditional family structures, while a global phenomenon, presents a particular challenge in Pakistan where formal alternatives are scarce. This could lead to increased social isolation, mental health issues, and neglect among the elderly. The absence of specialized geriatric care facilities, trained healthcare professionals, and community-based support programs means that many elderly individuals with chronic conditions or disabilities will not receive the care they need. This is a critical reform opportunity for the Ministry of National Health Services, Regulations & Coordination to develop a national strategy for geriatric care, potentially amending the National Health Policy to include specific provisions for the elderly, drawing lessons from countries like Sri Lanka which has a relatively advanced elderly care policy in the region.

Addressing Demographic Realities and Fiscal Constraints

The 2023 Census necessitates a recalibration of Pakistan’s demographic trajectory, as the realized population growth rates have outperformed previous UN projections, suggesting that the 'youth bulge' will persist longer than estimated in 2019 (PBS, 2023). While the national median age is rising, characterizing Pakistan as no longer 'young' is statistically premature; the country remains in the early stages of the demographic transition, with the median age still significantly below the global average. This demographic persistence complicates the narrative of a 'coming shift,' as regional disparities—notably higher fertility rates in Balochistan compared to the replacement-level trends beginning in parts of Punjab—suggest that the demographic dividend is geographically fragmented. Furthermore, any proposed expansion of social security must confront the reality of Pakistan’s high debt-to-GDP ratio and stringent IMF conditionalities (IMF, 2024). These fiscal constraints render large-scale, state-funded pension reforms improbable in the short-to-medium term. Without a formal tax base—which remains elusive given that over 70% of the labor force operates in the informal sector—the causal mechanism linking policy ambition to fiscal reality remains broken. Any viable reform must therefore pivot from state-led pension models toward micro-contributory schemes that account for the volatility of informal income streams.

The Gendered Nature of Elderly Poverty and Care Structures

The discourse on 'traditional family support' often ignores the gendered architecture of elderly poverty in Pakistan, where women face compounded disadvantages due to lower lifetime labor force participation and restricted access to formal assets (World Bank, 2022). The assumption that nuclearization inevitably leads to a collapse in financial support for the elderly is theoretically incomplete; it fails to account for the role of remittances. The causal mechanism is frequently the opposite: urban migration often facilitates a 'transnational' or 'inter-city' care model, where remittances from migrant workers provide the liquidity necessary for rural elderly survival, even if co-residence is lost. However, this relies on the male-dominated migrant labor force, leaving elderly women without formal pensions or direct income, thereby increasing their vulnerability. Furthermore, the critique of public health expenditure must be nuanced: the crisis is not merely a lack of funding, but a structural deficiency in specialized geriatric infrastructure (WHO, 2021). The existing health budget is heavily skewed toward maternal and child health, leaving a vacuum in training for age-related chronic conditions. Consequently, the erosion of the family unit does not just reduce 'care'; it exposes the lack of a specialized health apparatus that can replace the traditional, albeit informal, caregiving burden previously borne by women within the household.

Conclusion & Way Forward

Pakistan's demographic future, while still dominated by its youth, is undeniably shifting towards an older population. The current policy framework, characterized by fragmented social security and an underfunded healthcare system, is ill-prepared for this inevitable transition. The challenge is not merely to react to an ageing population but to proactively build resilient systems that ensure dignity and security for all citizens, irrespective of age. This requires a multi-pronged approach, encompassing legislative reforms, increased public investment, and innovative social programs. The Ministry of Finance, in coordination with the Ministry of National Health Services, Regulations & Coordination, must prioritize increasing public health expenditure to at least 3% of GDP within the next five years, specifically earmarking funds for geriatric care and NCD management. This would require amending the annual budget allocation process to reflect long-term demographic realities.

Furthermore, the EOBI Act needs to be reviewed and expanded to include the vast informal sector, perhaps through a tiered, contributory-cum-non-contributory model, similar to schemes in other developing economies. This named-agency reform, led by the Ministry of Overseas Pakistanis & Human Resource Development, would require legislative amendments to the EOBI Act of 1976, drawing inspiration from countries like Vietnam which successfully expanded social insurance coverage. The risk of this reform failing lies in inadequate political will and resistance from informal sector employers, necessitating strong enforcement mechanisms and public awareness campaigns. Beyond formal systems, fostering community-based elderly care initiatives and leveraging digital platforms for remote health monitoring can provide cost-effective solutions. Ultimately, the coming demographic shift is not a distant threat but a present reality demanding immediate, courageous policy decisions. The failure to act now will not merely be an economic misstep; it will be a profound moral failing, leaving future generations to grapple with a crisis of care and compassion.