Figures from the Office for National Statistics (ONS) show that there are a record number of centenarians in the UK. This population has quadrupled over the past thirty years. In 1986, there were estimated to be 3,640 centenarians. The latest figures puts the number at 14,570.
- More centenarians in the UK than ever before – 14,570 recorded
- We are very poor at estimating our life expectancy – especially men
- To fund our unanticipated longer lives could require us to save thousands more for our retirement
To put this in context, 14,570 people equates to 234 London buses. To bring this transformation to life, the British monarchy began the tradition of sending telegrams to centenarians in 1917. In 1917 King George V sent just 24 congratulatory messages.
Our longer lives are to be celebrated, but they also have implications for how we plan for and manage our retirement.
Women are better at guessing life expectancy then men
Aviva research found that we are very poor at estimating our life expectancy2. Men in Britain guessed that they would live for another 15 years beyond the age of 65. Official statistics put the actual estimate at 18.5 years3. Men therefore underestimated by 42 months. Women in Britain guessed that they would live for another 19 years beyond the age of 65. Official statistics put the actual figure at 20.9 years. Women therefore only underestimated by 23 months.
Thousands need to guard against running out of money
Latest government figures4 showed that 159,000 people took flexible payments from their pensions in Q2 2016 under the new “freedom and choice” rules. This was a record high. The new pension flexibilities combined with our growing life expectancy increases the need for us all to carefully manage our retirement plans to avoid running out of money.
Commenting on today’s figures, Alistair McQueen, Savings & Retirement Manager at Aviva said:
“A record number of centenarians is a cause for celebration. It also increases the need for us to plan for and carefully manage our retirement.
“Aviva welcomes the new pension freedoms. We welcome choice and believe our customers should be trusted with their own money. It also raises the need for greater support for savers to guard against the risk of running out of money in retirement.
“For a typical man to fund for an unexpected three-and-a-half years of life expectancy could require more than an £35,000 in extra pension savings5.”
Free tools are available to help savers. For example, Aviva’s online Retirement Planner gives an indication of life expectancy and helps savers calculate how much they may want to save to fund their later life. Encouragingly, over 200,000 savers have used the tool in the past year - http://www.aviva.co.uk/retirement/tools-and-calculators/my-retirement-planner/
Ends
Sources
- http://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/bulletins/estimatesoftheveryoldincludingcentenarians/2002to2015
- http://www.aviva.com/media/news/item/uk-how-long-will-i-live-17458/
- http://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/20132015
- https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/540393/Pensions_Flexibility_July_2016.pdf
- Aviva’s calculation: Median gross salary in the UK is £27,600. Targeting two-thirds of this sum in retirement equates to £18,200 each year. c£8,000 of this could be provided by the state pension. Aviva’s research indicates that men are likely to live for three-and-a-half years longer than they expect. A simple calculation indicates that £35,700 would be needed to fund the unanticipated three-and-a-half years of life expectancy.
If you are a journalist and would like further information, please contact:
Aviva Press Office: Fiona Whytock: 07800 692 299 or fiona.whytock@aviva.co.uk
Aviva’s retirement spokesperson, Alistair McQueen, is available for comment/interview
Notes to editors:
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