Commenting, Steve Webb, Director of Policy at Royal London said:‘Over the last century we have seen massive improvements in life expectancy, but these improvements did not always happen smoothly. Even over that period of dramatic improvement there were times when life expectancies improved more slowly, and we seem to be in such a period now. But the ONS are quite clear that for both men and women, life expectancies are set to continue to rise dramatically over the coming decades. It is vitally important that policy makers and the pensions industry address these issues as a matter of urgency and do not assume that a few years of slower improvement constitute a long-term trend. Reports of the death of longevity improvements seem to have been rather overdone’.
Alistair McQueen, Head of Savings & Retirement at Aviva said: “Millions risk running out of money in retirement if we fail to consider our increasing life expectancy.
“When the state pension age was introduced in 1948, women and men could expect to receive their state pension for 19 years and 12 years respectively. Today’s data predicts this will dramatically increase by 2066 – to 25 years for women and 23 years for men – including the planned increase in the state pension age to 68.
“The pension freedoms introduced in 2015 give people much greater freedom over how they spend their savings in retirement. It is vital that we consider how long we need our savings to last in retirement. Worryingly, official figures found that only 29% of us are thinking about how long we need our money to last – with 71% flying blind.2 Aviva’s own research also found that we routinely underestimate our own life expectancy.3
“Failing to consider our life expectancy increases the risk of running out of money in retirement. If a retiree in 2066 based their plans on 1948’s reality, a woman would run out of their private savings with 6 years left to live. For a man, their private savings would be exhausted with a scary 11 years to left to live.
“The pension freedoms have been welcomed by millions of savers, but with freedom comes responsibility to plan. Failing to plan increases the risk of poverty for millions in retirement.”
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