Over 50s underestimate life expectancy by up to eight years
Men and women aged 50-64 on average guessed their life expectancy to be 82-years old, but official statistics reveals that the average 50-64-year old man will likely live to 88 while for women, it’s 90.
The research by Retirement Advantage suggests that the population needs to “radically rethink” pensions and retirement, particularly in light of the pension freedoms.
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.
Andrew Tully, pensions technical director at Retirement Advantage, said: “Planning for retirement can be a complicated business and no one knows how long they will actually live. The pension freedoms have given people the opportunity to plunder pension pots early, often before planned retirement ages. This is potentially storing up trouble for the future, especially if people are underestimating how long these pensions need to last in retirement.
“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.”
You can use this free average life expectancy tool from Retirement Advantage to help you work out how many years you’re likely to be a pensioner.