Soaring UK life expectancy statistics could see Pension ages lifted to 70
The Office for National Statistics has recently published its latest estimates of UK life expectancy with increased life expectancy likely to force a further increaseA�in proposed changes to the state pension age to be readjustedA�from 68 to 70. The statistics highlight that life expectancy at birth in 2016 has now hit 91.9 years for females and 89.3 years for males. Looking to the future in 50 yearsa�� time this is expected to increase to 98.1 years for females and 96.1 years for males. And by 2066 half of new born baby girls and 44.2% of boys will be projected to live to at least 100 years old.
This a�?seemingly relentlessa�? march of rising life expectancy is something thatA�Greg Pogonowski, Senior Associate at Lime Financial in Dubai,A�believes presents a�?monumental challengesa�? to both individual savers and society as a whole. As a result he is predicting a change inA�the state pension age to ensure that the state isna��t overburdened by commitments to old age pensioners. a�?While living to 100 now is celebrated as a landmark event, in the
not-too-distant future the King or Queen will need to employ an army of servants to write telegrams to our burgeoning population of centenarians,a�? said Greg. a�?These latest figures also place the proposed acceleration in the rise in the state pension age to 68 into sharp relief. Prior to the equalisation of the womena��s state Pension age with mena��s under the coalition Government, the UK state Pension age hadna��t been changed at all since the modern welfare system was introduced in the 1940s.a�?
As a result, given that life expectancy has increased almost constantly over that period a�� and is projected to continue its upward trajectory a�� Greg predicts that this is a�?unlikely to be the last state Pension age hike we will seea�? and future generations could have to wait until 70 and beyond to receive their state Pension. After all, when the original state Pension age was chosen at 65, life expectancy was not much more than 30; so maybe a realistic state Pension age should be 90?
a�?Individuals need to consider the implications of rising life expectancy when planning for retirement. Research shows savers aged 55-59 who have accessed their savings using the Pension freedoms risk vastly underestimating how long their Pension income will need to last for, with over half believing it to be 20 years or less. With large numbers of people making annual withdrawals of 10% or more, there is clearly a serious risk savers will run out of money in retirement.a�?
Greg adds that longer life expectancies will severely increase the strain on the UKa��s a�?already bucklinga�? NHS, and in particular the long-term care system. a�?Proposed reforms designed to address issues in this market have been delayed time and again, and ita��s now vital politicians put political squabbling to one side and set out a bold vision to cater for our rapidly ageing society,a�? he added. Cana��t see it happening though, as each successive political generation seems to hope that it will be their successorsa�� problem not theirsa��a��a��a��.
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