Rise in life expectancy puts pressure on state pension age

14/08/2018 News Team,

There is likely to be an additional 8.6 million UK people above 65 years-old in 50 years, according to new Office of National Statistics (ONS) data.

In 2016, there were 11.8 million UK residents aged 65 years and over, representing 18 percent of the population, 25 years before, there were just 9.1 million, 15.8 percent of the population.

This rise puts further pressure on the state pension age. In 2017 there were 295.7 people over state pension age for every 1,000. However, this is projected to jump to 393.6 people per 1,000 by 2066.

The group aged over 85 is set to rise fastest. In mid-2016, there were 1.6 million people aged over 85 (two percent of the total population), however by mid-2041 this is projected to double to 3.2 million (four percent of the population). By 2066 this figure could treble, meaning there will be 5.1 million over 85s, representing seven percent of the UK’s population. 

There are also more people over 65 working (10 percent), compared with just 5 percent in 1998. However, 36.2 percent of those are now self-employed.

Nathan Long, senior pension analyst at Hargreaves Lansdown, commented: “The number of people over 65 is due to swell and those aged over 85 are the fastest growing group of all, meaning that further increases to when we receive our State Pension look inevitable. It’s possible to side step any future increases by saving into a pension personally.

"Anyone retiring today needs to ensure their pension will last for as long as they do. A sustainable approach is to draw only the income generated by the investments in your pension, but buying an annuity guarantees you won’t run out of money, no matter how many birthdays you celebrate. 

“In the meantime, it’s good news for companies manufacturing balloons, candles and cake as we look destined to enjoy more and more birthdays.”

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