When King George V began the tradition of sending congratulatory letters to those reaching their 100th birthday in 1917, he wrote to just 24 people and reportedly worried that if many more lived that long, he might not have time to sign them all. Today, what started as a personal royal duty has become a full-scale palace production line (which, given the King’s well-documented impatience with leaking fountain pens, is probably just as well).

Britain’s cohort of centenarians is growing. Figures from the Office for National Statistics (ONS) released late last year show 16,600 people aged 100 or over in the UK in 2024 — double the 8,300 recorded in 2004. Longer lives are something to celebrate. But the latest healthy life expectancy data, out last week, casts a shadow: the years we can expect to spend in good health are now at a record low.

In 2011, men could expect to stay healthy to about 63 and women to 64. Today it’s barely 61 healthy years for both — a stark reminder that we are living longer, but not better for longer. That pushes up state pension costs, piles pressure on the NHS and, most expensively of all, lengthens the years many will need care. The most immediate reality, though, is closer to home: those extra decades will largely have to be funded by us.

Yet many of us still plan our finances as if we’ll pop our clogs by age 85. We save as if retirement lasts 15 years and invest as if growth stops mattering at 60. In reality retirement may now stretch 30 years or longer. The biggest financial risk today is brutally simple: outliving your money.

Longevity, in short, has rewritten the rules. Here are my five financial hacks to plan for a 100-year life.

1. Assume you’ll outlive your money

The pensions landscape has shifted from defined benefit pensions, where employers carried the risk, to defined contribution pots, where we do. That means the biggest retirement risks — longevity, inflation and market performance — now sit squarely with you.

Many retirement models assume income lasting 30 years — to about age 95 if you retire at 65. That is the logic behind the “4 per cent rule”, devised in 1994 by the American financial adviser William Bengen: withdraw 4 per cent of a diversified portfolio, increase the money you take 2 per cent a year to cover inflation, and history suggests the pot should last three decades.

Sensible, given average life expectancy at 65 is mid-eighties for men and high eighties for women. But “average” can be a risky word. A 65-year-old woman has a roughly 25 per cent chance of reaching her mid-nineties, with a 6 per cent chance of hitting 100. The healthier and wealthier you are, the longer your horizon.

The old rules of thumb — de-risk in your sixties, glide into bonds — no longer apply. Inflation plus longevity can be a double whammy. Staying invested in growth assets for longer may feel uncomfortable but so will running out of money at 87.

Recent findings from the Association of British Insurers show a growing trend for retirees to “flex then fix”: using drawdown early, then buying an annuity later to lock in guaranteed income. It can make sense. But fixing too early, even at 70, risks leaving you short if inflation spikes and retirement lasts decades.

Annie Coleman from Stanford University’s Center on Longevity tried an online life expectancy calculator factoring in health and lifestyle. Her result: 102. I had a go myself and got 88, which probably says more about my habits and genetics.

No calculator is clairvoyant, but that’s not the point. While many of us will budget our household finances and model our pensions to the penny, we often fail to stress-test for how long we might live. It’s not about living on beans — if anything, many older people oversave. It is about planning for 35 years or more and ensuring that, in advanced old age, essential spending is covered by something secure.

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2. Match income to the way you’ll actually live

The latest data from the ONS on healthy life expectancy shows a worrying shift in the UK’s longevity story. We are not just living longer — we are living longer with illness, disability and care needs. This has far-reaching implications for policymakers and our own personal finances.

Retirement spending is not a straight line but a curve — the so-called “retirement spending smile”. Spending is typically higher in the early, active years, falls as mobility slows, then rises again as health needs and care costs increase.

It is crucial to distinguish between your health span — your active years — and your care span, when support may be needed and costs can escalate. Later-life care can be prolonged and expensive, yet the UK offers few dedicated care savings products, leaving households to rely on ringfenced savings or property wealth.

The danger is that many of us plan enthusiastically for that trip to Tuscany at 70 and underestimate our care needs at 92. Care is the great uncertainty. We know a significant number of us will need support in old age, but not everyone will — which makes planning for it psychologically easy to avoid.

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3. Invest to benefit from the longevity boom

Longevity is not just a financial planning challenge. It is also an investment opportunity reshaping entire economies. As populations age, demand is rising across healthcare and biopharma.

The care economy alone points to structural growth. Modelling for England data from 2018 suggests that by 2035 the number of older people needing care could be 90 per cent higher than in 2015, with sharp rises in those requiring 24-hour support.

The same demographic forces reshaping care needs are also reshaping capital markets — turning longevity into a powerful investment theme. Investors can access this structural story through healthcare and demographic funds, specialist investment trusts and property vehicles focused on care homes, medical centres and retirement housing. Beyond bricks and mortar lies the wider silver economy, with over-55s controlling much of household wealth and driving growth in travel, nutrition, fitness and leisure.

Some argue this is simply “growth investing” by another name. Perhaps — but demographics are one of the few trends you can see coming and position for. If you can’t escape the tide, you may as well learn to ride it.

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4. Start your pension side hustle early

Delaying retirement improves the maths instantly: more years saving, fewer drawing down. But the real shift is not to work until you drop, rather it is to work differently.

Think of it as building a portfolio approach in your forties and fifties — developing skills you can monetise later on a flexible basis through consulting, teaching, writing or a small business.

This is already happening. The over-50s are one of the fastest-growing groups of entrepreneurs. Research from the insurer Direct Line Group showed that about 740,000 UK pensioners run side hustles, while polling by Virgin StartUp, a not-for-profit group that supports entrepreneurs, suggests a quarter of over-55s plan to start a business. A 2024 Continuum survey found four in ten adults expect to work during retirement to maintain their lifestyle.

Employers are adapting too. In 2024, the airline easyJet launched “returnships” aimed at over-50s and career changers. The business case is increasingly clear: experiments at the DIY retailer B&Q and carmaker BMW found older workforces boosted productivity, while broader studies show firms with higher shares of over-50s tend to outperform.

Recruiters increasingly recognise experience and calm decision-making as commercial assets, particularly as labour shortages and looming “retirement cliffs” threaten to drain institutional memory. Cognitive and behavioural performance often peaks in late midlife, from 55 to 60, just when many organisations begin pushing people out, according to a 2025 study in the journal Intelligence.

A 100-year life changes the purpose of work: less a single ladder, more a long portfolio sustaining income, identity and connection over decades.

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5. Max out the pension perks

The easiest way to prepare for a 100-year life is also the most boring: save more.

If you’re employed, take full advantage of employer matching on your pension contributions — it’s free money. Then remember pensions remain the most tax-efficient mainstream wrapper. A £1 pension contribution can cost 80p for a basic rate taxpayer, 60p for a higher-rate taxpayer, and 55p for additional rate taxpayers.

For higher earners, the tax system can make pensions even more compelling. The way the tax-free personal allowance begins to be withdrawn once you earn above £100,000 a year creates an effective marginal tax rate of 60 per cent on income between £100,000 and £125,140. This doesn’t include any salary paid into your pension — a powerful incentive to use them strategically.

Longevity is often framed as a demographic triumph. It is also a financial revolution. We are not simply living longer, we are living through a fundamental shift in how wealth must be built, invested and sustained. Retirement is no longer finish line — it’s likely to be the longest stretch and your money, along with your health, needs to go the distance.

Maike Currie is the head of personal finance at the savings consolidation firm PensionBee