Living To A 100
- BetterAskAdam.com
- Jan 14, 2024
- 4 min read
Updated: Jan 15, 2024
Baby boys born in the UK in 2020 can expect to live on average to age 87.3 years and girls to age 90.2 years, taking into account projected changes in mortality patterns over their lifetime. In 1981 average life expectancy was just 70. [1]
Since 1921, the number of centenarians in the population has risen from 110, a 127-fold increase. [2]
‘The Second 50: Navigating a multi-stage life’ from Aegon’s, highlights how radically different life after 50 will be from previous generations. [3] It claims:
Only 27% of people currently in employment expect a ‘hard stop’ retirement.
People aged 50-59 expect to spend almost a fifth (17%) of their later life in ill health.
Only 25% have considered future social care expenses in their retirement savings plans.
With people on average living longer, life after 50 is more likely to be ‘multi-staged’ than follow the historic convention of education, work and retirement. Those entering their Second 50 today have vastly different prospects from those of previous generations.
Lynda Gratton and Andrew Scott, professors at London Business School, are the authors of The 100 Year Life : Living and Working in an Age of Longevity [4]. They claim that:
Given the current level of household savings, those aged 20 today are likely to be working into their late 70s or even early 80s.
Those in their mid-40s may be working into their early or mid 70s.
These new ways of living create opportunities and possibilities. Yet most public debate around longevity is deeply negative. It is dominated by concerns over the risks of ill health and senility and the painful realisation that retirement will not be achieved at the age many expected, nor at the level of financial security imagined.
But it also means that the traditional path of school, work, retirement may. not be followed. People could to university after they retire, when they are interested in the subject rather than using it just as a help to a job. Working later, also means that older generations would be more valued. But of course it also means we have to reconsider the government's support for social care, taxation and how much we need to save personally.
Our existing social institutions are proving inadequate to deal with this increased life expectancy and throwing up stresses and strains that require debate and a new policy agenda.
Gratton and Scott say: "The increase in longevity has occurred slowly, but has reached a level that requires a fundamental redefinition of the social and financial institutions that support it. We can each look forward and do our best to prepare ourselves and our families for these longer lives. But the political and policy debate is only just beginning."
Highlighting the change in the pattern and extent of our lives, is one thing. Knowing what to do about it, is another. The Second 50 report however, does make some suggestions, including:
Stay invested for longer - Doing this has the potential to give your pension more time to recover.
Delay retirement – Keep on working and saving. While you are working, as long as you continue to pay pension contributions, so will your employer, boosting the amount invested. Once you reach age 75 individuals no longer receive pension tax relief on their pension contributions. They can however still contribute, as can their employers.
Generally, before age 75, the maximum amount you can save into a pension annually, without incurring a tax charge, is £60,000. This is called the annual allowance includes all contributions made by you, your employer and any third party on your behalf.
Consider working part-time - Working part-time while transitioning to retirement means you’ll receive an income and still benefit from employer pension contributions and reduces the amount of money you need to draw from your pension. Taking out smaller amounts can help to protect your pension pot and give it more time to recover.
Use other assets first – instead of taking out your pension, use other assets first to provide an income in retirement, for example cash savings.
Track down your old pensions - You could be missing out on money you’ve saved in workplace pensions from your previous employer(s) that you’ve lost track of or forgotten about. Check for any old pensions paperwork you might have around the house in the first instance. If you can’t find anything, then get in touch with your former employers to get the details of any old pension pots you might have – or try using the government’s pension tracing service.
Check out your state pension amount and date - The current full amount you can receive from the State Pension is £10,600 per year (£203.85 per week), this will increase from April to just over £11,500 per year – but not everyone is automatically eligible for the full amount. Check out your State Pension forecast on the government’s webpage to find out how much you might receive and when you’re able to claim from. And if you have any gaps in your National Insurance record how you can fill them to get the full State pension.
Get help if you need it – some useful resources are detailed below:
MoneyHelper is a government backed website offering free, impartial guidance on all kinds of money topics.
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