Women have historically lived longer than men, but this is gradually changing. Life expectancy has continued to increase all round as all generations enjoy unprecedented wealth, better nutrition, healthier lifestyles and the benefits of advancing medical science.
Mortality rates at older ages are thought to be improving because of a combination of factors, including the reduction of circulatory diseases, such as heart disease and stroke, partly driven by changing smoking habits and medical and technological advances.
Approaching retirement age
Research[1] by MGM Advantage shows that 82% of people approaching retirement age are underestimating how long they are likely to live. Men aged 55-64 estimated their average life expectancy to be 81 years old and women in the same age group estimate theirs to be 79.
The figures[2] show that an average 55-64 year-old is expected to live until 86 if they are male and 89 if female, meaning that men could be in retirement five years longer than expected and women for ten.
Changing the pensions landscape
It is important that people have a realistic expectation about how long they are likely to live, so that they can make adequate provision for retirement. Budget 2014 potentially changed the pensions landscape forever, allowing people more freedom and choice with their pensions.
With increased choice comes the risk that individuals may live longer than they anticipated, meaning they could outlive their retirement savings. If you don’t plan properly, then the funds built up could be exhausted in later life. This could lead to a decline in living standards and may come at the exact point when you need a regular income for expenses such as care fees.
Source data:
[1] MGM Advantage research among 2,028 UK adults, 314 of which were aged 55-64, conducted by Research Plus Ltd, fieldwork 17-22 October 2013. Respondents were asked, ‘Being as realistic as you can, approximately how old do you think you’ll live until?’
[2] MGM Advantage analysis of ONS cohort estimates of life expectancy – 2012.
Information is based on our current understanding of taxation legislation and regulations. The level of income you receive from your pension plan will depend upon a number of factors including the value of the plan when you decide to take your pension, which isn’t guaranteed and can go down as well as up.
