New statistics published in February 2012 by the Office for National Statistics (ONS), reveal that people are working longer than they used to. The average age at which people leave the labour market – a proxy for average age of retirement – rose from 63.8 years to 64.6 years for men and from 61.2 years to 62.3 years for women, between 2004 and 2010.
This average summarises information about the ages at which people stop working – for men, the peak ages for leaving the labour market are 64 to 66 years. For women, the peak ages are 59 to 62 years. Thus, retirement peaks around State Pension Age (SPA) for both sexes. However, many people choose to retire before SPA, and others to work beyond it.
There are inequalities in life expectancy between social classes. The latest estimates for England and Wales show a gap of over three years in life expectancy at age 65 between the highest and lowest classes in the National Statistics Socio-economic Classification (NS-SEC). Within the UK, life expectancy at age 65 is highest in England and lowest in Scotland.
A related question is whether people will be able to enjoy their retirement in good health. In 2008, the latest year for which figures are available, UK men at age 65 had 9.9 years of healthy life expectancy within a total 17.6 year life expectancy, while UK women at age 65 had 11.5 years of healthy life expectancy within a 20.2 year total life expectancy. These figures are for the average person and do not take account of differences in socio-economic class or location.
It seems obvious that extended healthy life expectancy offers us the attraction of later life activity and enjoyment. However, this carries with it the need for us to commit to making the active pursuit of health and well-being part of that life. The way to use ONS statistics is to recognise that in giving us average figures, they set benchmarks for us, for example of healthy life expectancy. Our own attitude of mind and lifestyle should become one of determination to exceed the average, whilst of course, enjoying the process! Good news also is that other ONS statistics forecast the increasing numbers of us who will become happily working octogenarians and active centenarians!
If you want to find out more or need advice about managing a good financial life in retirement, contact your usual adviser who will be happy to help.