First post-WW2 baby boomers turn 75 tomorrow

• Number of over-75s in the UK to pass 6m for the first time
• Those reaching 75 have already surpassed average life expectancies in 1946
• Welfare spending on pensioners up £42bn in real terms since 2001/02,
  yet 1.9m still live in poverty

The first babies born in post-war Britain celebrate a milestone birthday tomorrow (Monday 8 February 2021) as the ‘baby boomer’ generation reaches 75.

Nine months on from Victory in Europe (VE) Day on 8 May 1945, a sudden burst in the population was underway that resulted in almost one million (995,226) babies born in 1946 and a further 1.2 million the following year.

Analysis by the Equity Release Council (the Council) – the representative trade body for the equity release sector – predicts 562,710 baby boomers will mark their 75^th birthday this year, followed by another 720,971 in 2022.

The UK’s over-75 population is expected to pass 6m for the first time next year and grow by another 50% by 2040 to reach 9m.

The average life expectancy at birth in 1946 was just 68.9 years. Some baby boomers will have gained two extra decades over their lifetimes thanks to improving living standards, medicine and technology.

The average life expectancy of a 75-year-old man today is 87 years and 89 for a 75-year-old woman. Both have a one in four chance of living another five years beyond this.

Almost 20,000 (19,119) baby boomers who turn 75 this year can expect to live long enough to receive a letter from Buckingham Palace on their 100^th birthdays in 2046, when the centennial VE Day celebrations will also take place.

Financial landscape fundamentally changed

The Council’s analysis shows how baby boomers have lived through fundamental changes to living standards over the last seven and a half decades:

• The average UK house price was £62,488 in today’s money (£1,459 in 1946) compared to £230,920 in 2021
• The average weekly income was approximately £214 in today’s money (£4.60 at the time) compared to £521 now
• The State Pension paid out £1.6s per week for a single person and £2.2s for a married couple – around £86 in today’s money – compared to £175.20 in 2021.

The research also highlights how tastes have changed. John and Margaret  were the  most popular boy’s and girl’s names in 1946 compared with Oliver and Olivia today.

Pensioner poverty persists despite increased welfare spend

The UK’s ageing population means over-65s already outnumber people aged 14 and younger across the country (12.7m vs. 12m). By 2032, the nation will be home to more over-65s than under-20s.

This trend has resulted in a greater share of public spending being allocated to older generations. Welfare spending on Britain’s pensioner population grew £42bn in real terms from £90bn in 2000/01 to £132bn in 2019/20. Despite increased real terms spending 1.9million pensioners still live in poverty.

Previous research by the Council reveals how property is the single biggest source of household wealth for over-75s in Great Britain at over £775bn.  Housing accounts for 45p in every £1 of wealth among households aged 75-84 and 53p in every £1 for the over-85s.

Jim Boyd, CEO of the Equity Release Council, comments:

“Longer lives should be celebrated as a reminder of the huge economic and social progress the baby boomers have lived through.

“Retirement today can offer new possibilities to explore once people’s work years are done. However, many people face an uphill struggle to secure the lifestyle they aspire to. Care funding is in short supply and pensioner poverty remains a reality for many older households.

“Today’s retirement landscape makes it vital for people to think about how best to use all their assets to support their financial plans. Many people wish to grow old in the comfort of familiar surroundings, so the option to unlock property wealth to supplement pension income can give them a better chance of securing a comfortable retirement.”

Key economic indicators and population facts – comparing 1946 and 2021