Thousands of pensioners and state pension recipients born in these years are at risk of being left penniless due to increasing life expectancy. Last year, there were 14,850 centenarians (people aged 100 or older) in England and Wales, which includes those born in 1924 or earlier.
Alarmingly, these individuals could find themselves short of funds. Clare Stinton, head of workplace saving analysis at Hargreaves Lansdown, warned: “Living longer means we need bigger pension pots, and with many people exiting the workforce in their mid-60s they could spend over 30 years in retirement.”
This comes as data from the Financial Conduct Authority raises concerns about the sustainability of pensions. Over 225,000 income drawdown pots had a withdrawal rate exceeding eight percent in a year.
Ms Stinton cautioned: “Taking too much out over a long time period will run down your pension and leave you short of money. Someone withdrawing eight percent per year from a £200,000 pension could see their pot exhausted by their mid-80s.”
According to the Savings and Resilience Barometer from the platform, a single person now requires £25,000 annually for a moderate retirement, while couples need £36,480.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, stated: “Even adopting a smaller increase exposes the huge challenges people face in planning for retirement.”
The study revealed that 12.2 million households do not have adequate pension savings for a comfortable retirement.
However, nearly seven million of these households have surplus cash or investments that could enhance their pensions or SIPPs.
Ms Morrissey continued: “It’s a simple shift that could see 1.8m households passing the threshold for a moderate retirement income and securing their financial future.”
The number of centenarians in England and Wales has seen a notable rise up until 2021 thanks to the post-first World War baby boom generation, Birmingham Live reports. The figures climbed from 10,930 in 2018 to 14,370 in 2021.
A report highlighted the demographic impact of this age group: “The large post-first-world war birth cohort, aged 103 years in 2023, accounted for 9.7 prcent of those aged 100 years and over,” adding, “As this cohort ages and decreases in size, the effect on the size of the centenarian population continues to reduce.”
