More people than ever celebrate their 100th birthday. Here’s why it affects financial plans

More people in England and Wales are celebrating their 100th birthday. It could have implications for your financial plan and creating an income in retirement.

According to a release from the Office for National Statistics (ONS), on Census Day in 2021, there were 13,924 centenarians living in England and Wales. The oldest person to complete the census was 112.

While centenarians represent just 0.02% of the total population, the number of people celebrating the milestone is growing rapidly. In fact, when compared to 100 years ago, the number of centenarians has increased 127-fold. Between 2011 and 2021, the number of people over 100 increased by 24.5%.

Once population is taken into account, the UK ranks as the ninth country for the highest number of centenarians.

Centenarians will have lived through the second world war and decimalisation

The almost 14,000 centenarians who completed the 2021 census have lived through many defining moments.

Babies born in 1921 would have been just 18 years old when Britain entered the second world war. They would also have lived through:

• The establishment of the NHS in 1948
• Commercial television starting in 1955
• The introduction of the decimalisation system affecting currency in 1971.

As people live longer lives, it raises some challenges about how to create long-term financial security.

Workers may need to save far more for their retirement or adjust their plans

Rising longevity could mean people spend far longer in retirement.

With people often thinking about stepping away from work in their 60s, some could find their pension needing to provide an income for four decades. As a result, workers may need to start considering how they’ll save enough to meet their lifestyle goals, or whether to adjust their plans, such as phasing into retirement gradually.

Baby girls born in 2021 have an almost 1 in 5 chance of reaching their 100th birthday, while baby boys have a 1 in 7 chance. As celebrating the milestone becomes more commonplace, the target amount to save for retirement could rise sharply.

Engaging with your pension during your working life may help your retirement savings and plans stay on track.

Retirees could benefit from considering life expectancy when they withdraw an income

It’s not just those saving for retirement that may want to consider the effect life expectancy has.

If you’re already withdrawing an income from your pension or other assets, is it sustainable – if you lived to 100, could your assets run out during your lifetime?

Some retirees might find they’re withdrawing too much now, which could leave them facing financial challenges in the future.

A retirement plan can help you assess how the financial decisions you make today could affect your long-term financial security, including if you live to 100. It may help you balance your goals with stability.

Longer lives may mean more people need support later in life

Living longer may come with more health complications too. It could mean you need to pay for support or care costs in your later years.

A longer life doesn’t mean care costs are inevitable. Indeed, a quarter of centenarians reported having good or very good health, and a third weren’t affected by disability at all. What’s more, 2 in 5 have maintained their independence and live alone, and a fifth live in a private house with other people.

However, making potential care costs part of your long-term financial plan may mean you have more options if you do need help in the future.

Contact us to create a financial plan that suits your goals

A financial plan that’s tailored to you could provide greater confidence in your future. We can help you understand what steps you may take to improve your financial security considering a range of factors, including longevity.

Please contact us to arrange a meeting to talk about your retirement goals and any concerns you may have.

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.