New research 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 estimated it to be 79. Official figures show that the average 55-64 year-old is expected to live until 86 if male and 89 if female, meaning that men could be in retirement five years longer than expected and women for ten.
Aston Goodey, MGM Advantage said: ‘It is important that people have a realistic expectation as to how long they are likely to live, so that they can make adequate provision for retirement. The chancellor’s Budget changed the pensions’ landscape forever allowing people more freedom and choice with their pensions. We fully support the idea that individuals have more say over how they access and spend their pension savings.
‘With increased choice comes the risk that individuals may live longer than they anticipated meaning they may 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 you need regular income for things such as care fees.
‘Many retirees are naturally conservative so while increased flexibility may have some appeal, they will also want to make sure they have long-term guaranteed income. The reality is simple, there is no other product in the market that offers such a high rate of return for life than an annuity.’
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