The number of people aged 85 and above is set to double by 2044, threatening to put further strain on the already stretched adult social care system.
The Office for National Statistics’ population projections, published today (October 21), showed a growing number of older people in the UK, partly due to the baby boomer generation reaching the age of 80, and partly due to rising life expectancy.
According to the ONS, in mid 2018 there were 1.6m people aged 85 years and over but by mid 2043 this is projected to nearly double to 3m.
The pensions industry warned the projections highlighted the need for social care to be reformed.
Ian Browne, pensions expert at Quilter, said: “Three things immediately jump out [...] that are in urgent need of a rethink, or even reform.
"The cost of the state pension, the provision of social care and the funding of the NHS are all going to need to be suitable for generations to come, but each is woefully underfunded currently, in part because of the increases in life expectancy.
“Of those three, the complete lack of a social care policy and strategy is glaring. We urgently need action as we are already at a crisis point."
Last week (October 14), the government announced as part of the Queen’s Speech that it will introduce changes to social care to "ensure dignity in old age".
Documents released alongside the speech detailed a 2 per cent precept relating to money collected through council tax but no further detail was given on what would be included as part of the proposals.
Previously a number of policy ideas such as a Care Isa, a cap on lifetime social care charges and tax-free withdrawals from pension pots were reportedly under consideration but these were not mentioned in the speech.
A debate on the government's social care proposals as part of the Queen’s Speech is expected to be held tomorrow (October 22).
Mr Browne said due to the uncertainty and vagueness surrounding social care policy “the impetus to save for later life has never been greater”.
He said: “For many people working backward will probably deliver the most accurate picture of how much you need to save. So consider your financial goals, factor in how much you are able to save over the next few years and then work out a suitable retirement age.
“But if that level of saving is not realistic don’t let it put you off altogether. Getting into a savings habit is a step in the right direction.”
Alistair McQueen, head of savings and retirement at Aviva, agreed the rapid growth in the older population will place increasing pressure on the UK’s ability to fund later life.
Mr McQueen said: “A larger pensioner population is likely to result in greater demand on the public purse, and could impact the availability of public services for individuals.
“To avoid this, we must help workers save more and to offer greater assistance to work longer in the years to come.
“Automatic enrolment has introduced more than ten million people to workplace pensions since 2012, but we must do more to ensure that our changing population are saving enough."
Anne Willmot, age campaign director at charity Business in the Community, said the impact of people living longer will affect not just the NHS and care sectors but also businesses of every size.
Ms Willmot said: “The idea that we will be able to retire in our early or mid-sixties will, for many, soon be a pipe dream.
“With people healthier for longer, and needing to maintain a decent level of income to support themselves, a sizeable percentage will want or need to remain in the workplace beyond state pension age.
“Businesses will also have to adapt to the fact that more employees will need to be part-time carers as their parents live longer.
"Responsible businesses are already preparing for both the challenges and opportunities that an ageing population will bring and putting in place age-friendly policies to make the most of the deep structural change emerging in the UK workforce."
amy.austin@ft.com
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