UK Sees Surge in Centenarians, Prompting Financial Planning Advice

The number of centenarians in the UK has increased by nearly 90% over the past two decades, with a 55% jump in individuals aged 90 and over reaching 645,000 since 2005, according to new data from the Office for National Statistics (ONS).

While the total number of people aged 100 or more remains relatively small at 16,400, this demographic trend has substantial implications for personal finances, inheritance, state pensions, and long-term care costs.

Shifting Demographics

The ONS data reveals that the increase in male centenarians has outpaced that of females. Between 2015 and 2025, the number of male centenarians rose by 47% to nearly 3,100, compared to a 15% increase for females, reaching just over 13,300.

Wales reported the highest rate of centenarians, approximately 26 per 100,000 people, with all four UK countries experiencing an increase in this rate since mid-2024. The ONS attributes the rapid increase in centenarians in 2020 and 2021, following a prior dip, to a decrease in births during World War I, followed by a post-war baby boom. The generation born between 1919 and 1920 reached 105 years old in mid-2025, causing a nearly one-third increase in the UK's population aged 105 and over, from 570 to 760.

Financial Planning for Longevity

Financial experts are advising individuals to plan for retirement durations of 30 or 40 years, a prospect that is no longer uncommon. Clare Moffat, pensions and tax expert at Royal London, suggests that retirees should carefully consider if their pension plans can support a life extending beyond 100 years. She recommends a blend of solutions, such as using a portion of a pension to secure a guaranteed income through partial annuitisation while keeping the remainder invested through drawdown.

Lucie Spencer, financial planning partner at Evelyn Partners, notes that while a hundredth birthday is a milestone, hundreds of thousands more people are living beyond 90. She emphasizes the tendency to underestimate future needs and highlights that even those retiring at state pension age (67 or 68) might require 25 years or more of income. While some lifestyle expenses may decrease in later retirement, they can be offset by increased costs for domestic, residential, or nursing care, as well as medical and heating expenses.

Strategies for Managing Pension Withdrawals

Sarah Coles, head of personal finance at AJ Bell, advises that building a substantial pension pot is the first step. She also points to managing income withdrawal strategies, with drawdown offering flexibility and potential for growth. However, she cautions about the risk of money running out in one's 90s or beyond, particularly due to sequencing risk—poor investment performance early in retirement combined with large withdrawals.

Coles suggests options such as variable withdrawal strategies, regular reviews of fixed percentage withdrawals, drawing only the 'natural yield' (dividend income) from investments, and purchasing inflation-linked annuities. For spousal provision, she notes that defined benefit pensions often include survivor benefits. With defined contribution pensions and drawdown, the remainder of the pot can be left to a spouse. However, she expresses concern that a majority of annuities are single-life policies, which can leave a surviving spouse in a precarious financial situation if the income-earning partner dies first.

The Impact of Care Costs and Inheritance

Marianna Hunt, a personal finance specialist at Fidelity International, points out that while longer lives are a cause for celebration, they present significant financial challenges. A person retiring at 65 might need their pension to last an additional 30 to 40 years, a period during which inflation can significantly erode purchasing power. Furthermore, the potential cost of care, which can exceed £50,000 annually for self-funders in care homes, could place considerable strain on retirement savings, especially for those requiring care for multiple years.

Hunt also highlights that increased longevity affects not only retirees but also their children, who may receive inheritances much later in life, potentially in their 60s or 70s, diminishing the impact such funds could have had earlier. She notes that individuals aiming for their desired retirement lifestyle must understand pensions, investing, and saving effectively.