Investing in longevity: How longer lives are reshaping markets and retirement plans

Author: Guy Foster, Chief Strategist

We are living through one of the great social transformations of modern history. We have quietly added decades to our lives, yet many of our ideas about work, retirement and ageing still belong to another era.

For most of the twentieth century, retirement lasted little more than a decade. Today, many people can expect to spend 30 or even 40 years beyond full-time work, and living to 100 is becoming a realistic possibility rather than an exception.

This so-called ‘grey wave’ is not a distant forecast. The number of people aged 60 and over is set to reach 2.1 billion by 2050, while the number aged 80 or older is expected to triple between 2020 and 2050.¹ At the same time, birth rates have fallen across virtually every major economy – the OECD average fertility rate has dropped from 3.3 children per woman in 1960 to 1.4 in 2024, well below the replacement level of 2.1.² The result is a demographic shift that is not cyclical, but structural – one that will reshape economies, markets and portfolios for decades to come.

For investors, longevity is therefore not simply a personal reality to plan around. It is one of the most significant and predictable structural investment themes of our time.

Stronger for longer: Greater quality, as well as quantity, of life

The most obvious beneficiary is healthcare and the life sciences. The traditional goal of extending lifespans has morphed to extending consumers’ ‘healthspans’. This is the number of specifically healthy years before the end of life.

Now that scientists understand the biological pathways of ageing, better than they did twenty years ago, a wave of medical innovation is following. In many cases, these innovations are slowing the progress and easing the symptoms of the typical conditions that afflict us as we age.

Precision cancer therapies, new Alzheimer’s treatments, the much-discussed GLP-1 ‘weight-loss’ drugs, and gene-editing technologies such as CRISPR are all moving from the laboratory towards the clinic. The prospects for extending healthspan appear more promising today than at any point in the past two decades, driven by a surge of innovation from biotechnology and medical technology companies.

Importantly, the opportunity extends well beyond drug developers. Medical technology – from robotic surgery to remote monitoring – is another growth area, much of it still underpenetrated with significant room to expand. Telemedicine, wearable devices and smart homecare technologies are all growing as health systems strain under rising demand.

The wave also washes across housing, consumer goods and financial services. Retirement housing is chronically undersupplied – fewer than 3% of UK homes cater to the retirement market. Retirees with time, health and money are driving demand in travel, leisure, nutrition and wellness. And as people build larger savings pots to fund longer lives, demand grows for wealth management, insurance and holistic financial planning.

The longevity economy comes of age

Perhaps the most under-appreciated shift is in how older consumers behave. Companies are realising that that the ageing population should not be viewed through the lens of decline. We believe the fastest-growing consumer cohort heading into the 2030s will be older, richer, and more tech-enabled than any generation in history. People that are ageing will not behave like they are in decline but rather will seek optimisation.

This is a genuinely new phenomenon. Tomorrow’s older consumers will be willing to spend on products and services that help them stay healthy and independent for longer including more digital natives with each year that passes. They are rich in both time and money, active online and comfortable with technology. As Nik Modi and colleagues at RBC Capital Markets note, “there is a reason Japan is one of the largest luxury markets in the world – it has the oldest population in the world.”

It is a shift our Global Portfolio Advisory Committee, which draws on RBC Wealth Management’s global investment research and RBC Capital Markets’ analysis, has identified as one of the most compelling structural opportunities in the market today. This is giving rise to entirely new categories: functional nutrition, “longevity-as-a-service” subscriptions, and premium wellness offerings aimed at consumers actively spending to extend their healthspan.

But that is the average across developed economies – not everyone’s story. As the modern economy becomes increasingly bifurcated between haves and have nots, that same K-shaped economy will apply to the older cohort as well. Some older consumers will spend heavily to make the most of their remaining time; others, more economically constrained, will seek affordable access to the same benefits. Both groups will grow in aggregate.

The quiet erosion

Longer lives also carry a fiscal cost. Ageing populations place enormous strain on health, pension and social-security systems. Meeting these costs may well require higher taxes or increased government debt and, in turn, push up long-term interest rates.

This connects the grey wave trend to a broader debt challenge facing most developed economies. Governments unwilling to raise taxes or cut spending seem increasingly compelled to follow the path of least resistance: allowing inflation to run modestly hotter than the interest they pay on their debt, quietly eroding its real value over time. That drift toward higher inflation and managed lower interest rates is not a tail risk to be guarded against. It is the path of least resistance for the major deficit economies.

For savers, this matters enormously. In an environment of gentle ‘financial repression’, cash is likely to be a poor long-term store of value, and long-dated government bonds carry real risks if inflation persists. Sustained moderate inflation erodes the real value of accumulated financial claims – precisely the kind of erosion that patient, long-term investors must guard against.

What it means for portfolios

None of this constitutes a recommendation to buy any particular investment. But the broad implications for how a portfolio is shaped are clear.

• Purchasing power must be protected: Over a 30-year retirement, even modest inflation is corrosive: at 3% inflation, €100 today buys only around €41 of goods in 30 years. Holding too much in cash, however comfortable it feels, quietly shrinks what you have. A diversified mix, including real assets and equities with genuine pricing power, has historically offered stronger protection against rising prices than cash or nominal bonds alone.
• Diversify across the theme: The longevity theme spans multiple sectors and asset classes – healthcare, technology, consumer, real estate and financial services – allowing investors to gain exposure to a structural trend in diversified ways rather than through any single bet.
• Plan for the long horizon: Third, and most personally, longer lives introduce longevity risk – the simple danger of outliving your money. Planning for a retirement that may last to 95 or beyond, rather than to a conventional life expectancy, is now prudent rather than pessimistic.

As my colleague and wealth manager Michelle Holgate reframes the question: “It’s not so much, have I got enough money, but what does the money make possible for me?” Longevity, in other words, is both the opportunity and the risk – and planning for it well is what allows the extra years to be enjoyed rather than endured.

For more on planning for longer lives – including expert insights on health, wealth and purpose in your third quarter – explore our longevity content series. To discuss what this means for your portfolio, speak to your wealth manager.

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About the author

Guy Foster

Chief Strategist

Guy joined RBC Brewin Dolphin in 2006 and has previously served as Head of Research before becoming the Chief Strategist. His responsibility covers the investment strategy, providing recommendations on tactical investment strategies to our investment managers and leads the Investment Solutions business.

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¹Ageing and health, World Health Organisation, Oct 2025

²Society at a Glance 2024: OECD Social Indicators, OECD, June 2024

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