The UK's total fertility rate fell to 1.41 children per woman in England and Wales in 2024, the third consecutive year of decline and well below the 2.1 replacement rate. Scotland's rate sits even lower at 1.25. By 2026, deaths will outnumber births for the first time in modern history, according to Resolution Foundation data.
The immediate concern for CTOs and CIOs: workforce contraction. Fewer working-age people means tighter talent markets, particularly in technology roles already facing skill shortages. The Resolution Foundation projects 800 primary schools could close by 2029 as the pipeline shrinks.
Economics drive the trend. An Ipsos survey found 39% of 18-50 year-olds cite child-rearing costs as a barrier to parenthood. Raising a child to 18 now costs £260,000 for couples and £290,000 for lone parents, against a median UK income of £39,000. Childcare for under-3s runs £300 per week. UCL's Dr. Alina Pelikh points to housing costs and inadequate childcare support as primary factors, not ideological shifts.
Net migration has collapsed 75% to around 200,000 annually, removing what had been a population stabilizer. This compounds the workforce challenge: without immigration or new job creation, the Resolution Foundation warns of fiscal strain and low growth. Government spending cuts may prove difficult to sustain.
For APAC-focused tech operations, this creates both pressure and opportunity. UK firms will likely increase recruitment from Australia, Singapore, and other APAC markets. Conversely, APAC companies with UK operations should factor in rising labor costs and potential tax increases to fund an aging population.
The government has expanded free nursery hours, but data suggests it's insufficient to reverse the trend. The real question: will policy catch up to economic reality before the talent shortage becomes acute? Enterprise leaders planning UK expansion or relying on British talent should model scenarios for a shrinking working-age population. The demographics are clear, and the timeline is now.