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Help retirees understand the nuances of life expectancy and the link to lifestyle factors.
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Give retirees the online tools and information to help them make informed decisions about their retirement savings.
Pension Wise, the government’s guidance guarantee service, must discuss life expectancy as part of people’s retirement planning, an Aviva report says.
Making your money last in retirement is the latest in a series of special reports on key retirement themes, written by Aviva’s head of policy, John Lawson.
The report suggests that using nationally-agreed longevity figures that take into account the differences between savers and non-savers will provide people with a more accurate picture of their life expectancy.
Taking longevity as its central focus, the report considers the implications for people who underestimate their life expectancy. In particular, people who are savers and healthy are likely to live significantly longer than the national average figures suggest.
People will have far more choice in what they do with their savings from April when the new pension freedoms take effect. With the option to take all of their money in one lump sum if they wish, they could find themselves penniless if they outlive their savings. New tools are increasingly becoming available to help people make their own life expectancy assessments and will prove a valuable resource.
The report also looks at the significant regional differences in life expectancy in the UK, and the link to lifestyle factors such as smoking and obesity.
The lack of clarity around the interplay of factors affecting life expectancy could mean than many people default to average longevity figures that do not reflect their personal situation, either because they do not understand that as they get older their life expectancy increases or that, as a healthy saver, they need to add years on to their life expectancy.
John Lawson, Aviva’s head of policy, said:
“It’s impossible to say with any certainty what an individual’s life expectancy will be, but we know enough about the factors affecting it to be able to arrive at informed conclusions.
“For a retiree sitting down for the first time and working through their finances and retirement plans it is absolutely essential that they have the most accurate view of their life expectancy. We think Pension Wise is the best place to start this conversation.
“Additionally, online tools are increasingly becoming available which are there to help consumers really consider how long their money needs to last.”
To view the full release and report please click on the link here |
