Rethinking retirement

The UK’s ageing population – are we ready?

In almost every country in the world, the proportion of the population over 65 is increasing. Between now and 2050, the number of over 65s is forecast to double. The UK’s ageing population presents us with an array of social and economic challenges that will take creativity and conviction to tackle.

16 Sep 2022

1. What is an ‘ageing population’?

Population ageing occurs when a country’s median age goes up, normally through a combination of people living longer and declining birth rates.

The median age of the world’s population is currently the highest it has ever been, and is forecast to continue rising throughout the 21st century.

2. Has population ageing increased demand for social care support?

According to research by The Health Foundation, the proportion of older people who need social care support at any given age has fallen. As a result, more older people are now able to live independent lives.

Through our Lifetime Mortgages, a form of equity release, Legal & General offers loans secured against the homes of people aged 55 or over to allow them to release tax-free cash as a lump sum, or series of lump sums. No repayments are required until they die or move out into long-term care, although many customers opt to pay the interest to prevent the amount they take out increasing. A lifetime mortgage can help pay off an existing mortgage, make home improvements, or gift money to family members.

3. How is our ageing population impacting the NHS? 

Although the demand for social care has fallen among older people, Health Foundation research shows, people are living longer and with long-term conditions, increasing demand for both primary and acute NHS services.

Through our partnership with Sir Michael Marmot and the Institute of Health Equity, Legal & General has helped to shed light on the link between health and living conditions, and the role businesses have to play in improving both. As the population ages, this will only become more important.

According to research by The Health Foundation, the proportion of older people who need social care support at any given age has fallen. As a result, more older people are now able to live independent lives.

4. What is the ‘sandwich generation’?

One outcome of the ageing population has been the growing prominence of the “sandwich generation” – those who are providing care (both physically and financially) for both their children and their parents, as well as juggling jobs and careers. These high-stress circumstances can make it difficult for people in this period of their lives to plan for their own retirement.

In partnership with the Open University, Legal & General has created a free ‘Midlife MOT’ course, designed to help busy people at this stage of their lives check in on their finances, work, and health, to make sure everything is on track. You can also work out your retirement income using our online pension calculator.

5. How is the cost of living crisis affecting retirement?

The cost of living crisis is deepening. According to research commissioned by Legal & General, more than 11 million people have put their retirement plans on hold as a result, and two out of three UK adults are concerned that rising costs will impact their future plans. Despite these worries, more than half have not sought financial advice and, according to our Deadline to Breadline research, the average household is just 24 days from the breadline.

In the third season of our award-winning podcast Rewirement, our experts discuss how to tackle life’s big financial decisions with confidence, including navigating the road to retirement amidst rising costs.

6. Do we have enough of the right housing for older people?

According to research by the House of Commons Library, there is a shortage of accessible specialist housing for older people in both the public and private sector. Older people are also significantly more likely to be under-occupying their homes, but lack of suitable accommodation to move into is a barrier to downsizing which has a knock-on effect on younger people facing a shortage of family homes. 

At Legal & General, we’re working hard to improve the options on offer. Our Inspired Villages offer aspirational homes for people over 65, and in 2021 we agreed a £500m partnership with NatWest to build 5,000 more. We also launched a part-exchange service to make the moving process as stress-free as possible.

7. Does where you live affect your retirement prospects?

Research by the Centre for Ageing Better shows that depending on where in the UK you live and how wealthy you are, your life expectancy can vary by up to ten years. Financial inequality has numerous knock-on effects for those in later life, including access to housing and retirement age.

Since April 2021, Legal & General has been compiling a report called the Rebuilding Britain Index, which serves as a quarterly survey of the country’s progress in levelling up less prosperous places and reducing inequality in the wake of the pandemic.

8. What is the link between population ageing and climate change?

It’s a link that works both ways. Older people are more likely to under-occupy larger properties, increasing their carbon emissions, and are also less resilient to extreme temperatures and emergencies like flooding.

Last year, Legal & General’s Inspired Villages business began construction on its first net-zero retirement village. Millfield Green, in Bedfordshire, will offer 200 homes, each using ground source heat pumps provided by The Kensa Group.