The Office of National Statistics revealed yesterday that 20 year olds are three times more likely to reach 100 than 80 year olds leading to concerns over the financial options available for an aging population.
Yates, said: “Expecting the state to provide is simply no longer an option. We need to think radically differently: working longer either full or part time, delaying draw down of retirement income, equity release and increased financial education from a young age are all factors to be considered.
“Living longer means as much time spent in retirement as we currently do in the workplace, and for a generation which will not have the luxury of defined benefit pensions, urgent change of mind set is required.”
Dean Mirfin, group director at Key Retirement Solutions, said: “Whilst today’s 20 year olds have an opportunity to plan for longevity those who have retires already may not be so fortunate both now, and in the future, equity release can and will no doubt provide a much needed addition for anyone’s retirement finances.
“With an aging population, it provides a greater scope for people needing to access equity release. From a broker perspective that can come in two forms, one is either for those transacting equity release themselves and of course the other is to refer it on.
“The challenge brokers have is that when you’re talking about today’s 20 year olds, and where they’re going to be in years to come, is to get them to start planning for their retirement and brokers are always going to struggle there.
“The opportunity for brokers is in the main is going to be those who are retiring now as opposed to those in the future.
“Whilst the ONS have produced a stark set of statistics for the future, the numbers today are still very dramatic and the opportunity isn’t one just there for the future, it’s one which is here now.”
Stephen Lowe, group director at Just Retirement said: “Whilst overall longevity is increasing, the number of years that people live in good health is not keeping pace. This means people will live for more years in poor health.
“IFA’s must ensure the assessment of their clients health is brought forward and becomes a key priority in any fact find for those clients approaching retirement. Today only one in seven customers attain the benefits of enhanced annuities.
“Just Retirement’s research shows the proportion eligible is closer to six in ten. The average extra income generated by an enhanced annuity compared to a standard annuity is circa 25%.
“Given people are living longer its critical customers don’t miss out on this additional income. It’s now the majority not the minority who qualify for enhanced annuities.”
