Number of centenarians set to grow 78% by 2041

Number of centenarians set to grow 78% by 2041
Photo: Andrea Piacquadio [Pexels]

More than 29,000 Britons could hit the grand old age of 100 by 2041, a study has predicted, raising questions as to what this means for younger generations' pension plans. 

A study by Bowmore Wealth Group has shown that, despite the morbidity blip from Covid-19, the number of people in the UK aged 100 or more is expected to grow from 16,000 in 2021 to 29,000 by 2041.

This is a 78 per cent increase, the study predicted.

It said life expectancy was expected to continue to increase possibly as a result of healthier dietary and lifestyle choices and advancements in healthcare.

The number of people aged over 66 is expected to grow by 38 per cent to 16.2mn in the next 20 years, up from 11.8mn in 2021.

Latest data also shows 130,000 people born in 2020, in the UK are expected to live to 100.

This is 17 times the current population of people in the UK aged 100.

Based on current life expectancies, those aged 40 in 2020, are expected to have a retirement lasting 16 years, if they retire at 66.

However, the Bowmore Group warned that many may discover their pension pot is not sufficient to fund the retirement they hope for, needing to work significantly past the retirement age.

Helen Thomas, financial planner at Financial Planning Corporation, said: "There are a number of financial planning implications that could occur if these predictions come true. 

"The first that comes to mind is the sustainability of our current pension system if people live 30-40 years past retirement age.

"There has been a lot of talk of raising the state pension age further, meaning that people would either have to work for longer or save a lot more into pensions and other investments to provide cash-flow at their desired retirement age.

"A consequence of increasing the state pension age is that under current rules,  it would also increase the age at which people can access their private pensions."

Thomas said: "An ageing population adds further pressure on defined benefit schemes to provide incomes for longer periods of time. I can envisage the government having to increase the minimum contribution levels into Auto-enrolment schemes too. 

"Another aspect is the impact of ill-health on an ageing population. While life expectancy may be improving, morbidity doesn’t necessarily follow, which impacts funding for long-term care, social care and the NHS."

She said that, when considering financial planning, cash-flow modelling tool is the first port of call as advisers can show the impact of ageing population predictions on a client’s finances.

Thomas added: "We will take into account ONS predictions but also can move timelines to show the impact of living for longer. We can also demonstrate the impact of paying for long-term care on financial plans.