Retirement... the longest holiday of your life

Imagine being on holiday for 20 years or more; what would you do for spending money? With life expectancy seemingly on an inexorable increase this is exactly what retirement means for many people.

When you retire, all the time you used to spend earning an income becomes spare time you need to fill, but without the income – a conundrum in itself.

When David Lloyd George introduced the old-age pension in 1908, the average life expectancy was somewhere in the 40s. Although he set the retirement age at 70, few people expected to get there. In 1909, around half a million people received the old-age pension; in 2009 there are more than 12 million pensioners. (Source: Investment Week)

What’s more, today, if you make it to age 65, a woman can expect to live for a further 23.4 years, a man for 21 years. (Source – www.statistics.gov.uk)

Currently, most of us can expect to receive a pension for at least 15 years. Even though the state pension age will increase to 68 by 2044, with the average life expectancy heading towards 90* it could mean more than two decades of payout in future.
*(Source – Office for National Statistics)

New research, part of a report by life insurer Scottish Widows, suggests:

• 1 in 3 Britons cannot afford to save regularly for their retirement
• A survey of 6,381 people showed that half of them weren’t saving enough for a comfortable retirement
• Only 51% of people are setting aside enough money to provide themselves with enough income for their retirement. (Source – BBC News.co.uk)

If you don’t save for your retirement now, it will be too late when you do retire. Some of today’s pensioners have found they can’t manage on their state pension alone and are having to carry on working to pay for their retirement.

If you are worried about whether you will have enough income when you retire contact us now.

 

Copyright Finance Speak Spring 2009