As many as eight in 10 (78%) over 50s are significantly underestimating how long they can expect to live. According to research from Retirement Advantage among people aged between 50 and 64, the average respondent said they expected to live until they were 82.
The research by Retirement Advantage found that 78% of people in their 50s thought they would live to 82. However, Government statistics estimate that men aged 50-64 will live to be 88, while women of the same age will make it to age 90.
The flexibility of pension freedoms, allowing savers unfettered access to their pots means many have raided their lifetime savings before reaching their planned retirement age. As such, Retirement Advantage warns that many will be left without sufficient income if they underestimate the time spent in their golden years.
One solution to this could be to buy an annuity with part of your pension savings so you can guarantee you will always be able to pay for your basic needs.
Retirement Advantage warns that many will be left without sufficient income if they underestimate the time spent in their golden years.
Andrew Tully, pensions technical director at Retirement Advantage, said planning for retirement can be “a complicated business” and that no one knows how long they will actually live.
He said: “The pension freedoms have given people the opportunity to plunder pension pots early, often before planned retirement ages. It’s important to remember these are averages and so the numbers mask significant differences, for example from male to female and area to area across the UK. However, there are tools available which can help people consider the probability of living to older ages.”
Tully added that this is an area where proper financial advice is key: “An adviser can make a plan for your personal retirement journey which considers all the risks at play, whether that be investment risk, or the risk of living longer than you may have expected.”
This was written by editorial staff at Professional Adviser. All views are from the publication.
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