The number of people over state pension age is projected to increase from 12 million in 2022 to 13.7 million by 2032, according to figures released last month by the Office of National Statistics (ONS).
This 14 per cent rise is predicted despite the UK state pension age rising to 67 from 2028. Meanwhile, the number of births is expected to fall by more than six per cent over the same period.
However, the ONS still believes the UK population will increase to 72.5 million by 2032 as a result of net migration reaching 4.9 million.
Rachel Vahey, head of public policy at investment firm AJ Bell, said: “While more people living longer should be something to be celebrated, a growing pensioner population puts more pressure on public finances to fund state pensions and provide care in older age.
“The ratio of working people to pensioners has to at least remain stable to make sure sufficient taxes are rolling in to help pay for these burgeoning costs. But with a falling birth rate that ratio looks fragile.”
When the state pension was first introduced in 1909 it was means-tested and restricted to those aged 70 and over, despite life expectancy at the time being just 52. Latest figures, from 2020-2022, show that in the UK males can expect to live for 78.6 years and females for 82.6.
The number of people aged 85 years and over was 1.7 million in 2022 with this figure expected to double to 3.3 million by 2047.
Meanwhile, a survey by insurer Sunlife has found that around 500,000 UK pensioners are still paying off their mortgages. The firm’s research suggests this group owes on average around £63,000, which equates to a monthly payment of just under £770.
SunLife CEO Mark Screeton added that the average home-owning pensioner has a property worth more than £330,000, but a household income of just over £30,000.
“This means that the vast majority are cash-poor and property-rich,’ he said, “and while most [pensioners] own their homes outright, around one in 20 still has a mortgage. For those people, a huge chunk – almost a third – of that relatively modest income is still being spent on housing.”
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