Receiving a congratulatory message from the late Queen Elizabeth II was once a comparatively rare event for someone reaching their 100th birthday and not, arguably, one designed to leave the monarch with regular attacks of writer’s cramp.
According to the four censuses that took place between 1921 to 1961 (the 1941 census was postponed due to World War II), the number of centenarians rose very gradually. In 1961, the figure remained below 500; over the following two decades, it rose to almost 4,000 and has risen almost four-fold ever since.
Dramatic improvements in healthcare, diet and living conditions, coupled with a steady flow of hugely successful public health measures, resulted in significantly improved air quality and working conditions and accounted for noticeable changes in mortality rates from the mid-1960s onwards.
In a report published last week, the Office for National Statistics (ONS) declared that in 2022, a total of 15,120 centenarians were living in England and Wales, the largest number on record and a 26% increase in just five years. The figure has more than doubled since 2002.
Medical advances in particular are responsible for a striking increase in life expectancy, although because these advances alone do not guarantee a healthy and disease-free lifespan, it is vital that we do what we can to boost our longevity and future quality of life.
Four in five centenarians are women, reflecting the long-standing trend of women outliving men.
The ONS report included the observations of one such lady who “recalled events she saw living in London like watching gas lights being lit in the streets; celebrating Empire Day with little flags at school; seeing neighbours getting into debt after the Great Depression; watching the Oxford-Cambridge boat race on a television in a shop window [because] no one had a television at home, and going to the Post Office to make a phone call in a cubicle [with] the assistance of an operator.
"After the war… clothing was still rationed. I saw people wounded during the war on the street selling matches and they maybe had just one arm or a crutch under the arm and just one leg. They weren't allowed to beg, but in fact, people put the money on the tray but didn't take the matches."
Black-and-white memories from a simpler, bygone age will strike a chord with many, but as the number of people aged 65 and above continues to rise, primarily because so many of them appreciate the benefits of regular exercise and a healthy diet, so concerns about how they may preserve their quality of life in future years move into sharper focus.
There’s little point being fit and healthy if you cannot afford to pay the gas bill. This begs the question: while many more people will enjoy considerably greater longevity than their parents and grandparents, are they in danger of running out of money at some point during their potentially elongated retirement?
Last October, I issued a warning to all current and prospective retirees in this column, noting that, “…at the risk of being cynical (or is that realistic?), should a future government conclude that it can get away with scrapping the pension ‘triple lock’… there’s plenty of evidence to suggest they could be tempted. It follows that having a back-up plan to supplement your retirement income could prove a shrewd move.”
The latest centenarian figures remind us that it is even more important for existing and future retirees to ask themselves whether they will run out of money once they’ve clocked off from work for the final time.
Average life expectancy for those currently aged 65 is 86 for women and 84 for men. However, a huge number of older, retirement-saving arrangements were designed in the expectation that people would retire at 60 or 65. Nowadays, most pension plans take account of rising life expectancy rates, although it goes without saying that folks who reach their 100th birthday will require larger pension pots, ostensibly because they will have more years of living to fund.
People tend to spend more during their early years of retirement on travel, holidays and other ‘fun’ items. However, while such expenditure gradually diminishes, a raft of other costs, including home help, care and cleaning services will start to climb, particularly for those with medical problems.
As there are so many variables (and interpretations) involved, it is difficult to determine exactly how much you will need to enjoy a long and comfortable retirement. Many advisers suggest that there is great merit in first deciding upon your required lifestyle. It’s at this point that matters become subjective: one person’s ‘moderate’ lifestyle could be perceived as pure luxury by another, while some couples couldn’t possibly survive on £54,400 a year.
The most credible, up-to-date figures, according to a pensions industry body, suggest the following amounts are required to fund a particular form of lifestyle:
For a minimum lifestyle per year: £14,400 for a single person, £22,400 for a couple.
For a moderate lifestyle: £31,300 for a single person, £43,100 for a couple.
For a comfortable lifestyle: £43,100 for a single person, £59,000 for a couple.
A couple wishing to fund a ‘ moderate’ lifestyle over 35 years would require a pension pot of approximately £983,000, though remember: this is before the corrosive effects of inflation are taken into account.
So, how can longer retirements be funded?
Tapping into their accumulated property wealth is a popular option for an increasing number of existing and prospective retirees. Property values over the past half century have risen on average by more than 460%, which explains why each year tens of thousands of people release a proportion of this cumulative wealth from their homes, tax-free, to supplement their income.
Releasing equity enables homeowners aged 55 and over to gain access to a percentage of the ‘hidden wealth’ built up in their property, either in the form of a tax-free lump sum or as regular drawdown payments, often spread over an agreed period.
The most popular method by which equity is released is through a ‘lifetime mortgage’ The amount homeowners may borrow is determined by their property’s value, as well as the owner’s age and that of their spouse or partner, should a couple make a joint application.
Two of the most attractive features of lifetime mortgages are: a) the absolute guarantee that homeowners continue to own their own home and b) there is no contractual obligation to make monthly repayments. Lifetime mortgages are repaid upon the eventual sale of the property, either following the death of both applicants or if they’re admitted into long-term residential care.
People interested in exploring the equity release option can compare equity release deals using smartER, a unique platform designed by Equity Release Supermarket, the UK’s largest independent equity release company.
Preliminary investigations / research complete, homeowners interested in learning more about the process should seek professional advice from a qualified adviser.
As the population ages, retirement planning becomes a ‘must-do’ for millions of folks who are likely to enjoy prolonged periods of retirement. Those hoping to receive a card from the King congratulating them upon reaching their 100th birthday may find that supplementing their retirement income using equity release could prove a shrewd move.
*Figures Calculated by the Centre for Research in Social Policy at Loughborough University on behalf of the PLSA Retirement Living Standards (RLS), Published 7th Feb 2024