A new report from MGM Advantage, put together with research conducted in October 2013, asked the following question of respondents: ‘Being as realistic as you can, approximately how old do you think you’ll live until?’ Compared to the last Office of National Statistics (ONS 2012) forecast, the answer from the 55-64 year olds, proved interesting.
The research results indicate 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. The official ONS 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 and women for ten years more than they expect.
Women appear to be more pessimistic than men regarding how much longer they think they have left. 85% of females responding in the research, approaching retirement age, underestimate their likely longevity compared to 79% of men. The research also found that 15% of women don’t expect to live past age 70, compared to 16% of men, and overall just over a third of 55-64 year olds can’t see themselves living beyond age 75.
Aston Goodey, Director of Sales and Marketing for 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’’.