This is despite rising concerns about the potential financial impact of ill-health, research from MetLife shows.
The nationwide study shows just 27% of non-retired over-60s have made financial preparations for the risk of suffering poor health with men much more likely than women to have taken action. Around 31% of men have made financial preparations compared with 23% of women.
The lack of preparation contrasts sharply with the high levels of concern expressed about how to cope financially with ill-health in retirement – research shows 62% of non-retired over-60s are concerned with 11% very concerned.
Rising life expectancy is turning the spotlight on the issue of healthy life expectancy and MetLife is urging people to consider the growing number of new retirement income solutions such as fixed-term annuities which provide increased flexibility during retirement.
Government statistics show the average 65-year-old man is expected to live to 83 and the average 65-year-old woman is expected to live to 85.6 years – however men can expect on average to spend more than eight years in poor general health while women could face 11 years in poor health.
Dominic Grinstead, managing director at MetLife UK said: “Increased life expectancy should be changing the way people save for their retirement with many now having to prepare for as long as 30 years of retirement.
“People are clearly aware of the risks of ill-health in retirement but, just as clearly, most have done little about it as it’s not a subject that many of us want to think about.
“We all want to have a healthy retirement but the risk of ill-health is real and retirement planning needs to adapt to enable savers to be able to cope financially with ill-health. There are solutions such as fixed-term annuities which offer increased flexibility ahead of traditional solutions.”
Fixed-term annuities – which offer terms as short as three years and the option of death benefits – enable savers to take an income at retirement and then, at the end of the term, to reassess their financial needs in line with other changing circumstances, unlike conventional lifetime annuities which fix income for life.
MetLife’s research shows the non-retired over-65s are more likely to have made preparations for the risks of ill-health in retirement – however still just 31% have made financial preparations.
Concern about the risks of ill-health is higher among the non-retired 60 to 62-year-old age group at 67% compared with 58% among the 63 to 64-year-old age group and 53% among the over-65s.
Savers in the North West are most likely to have made financial preparations for the risks of ill-health with 36% having taken action, compared with just 20% in Scotland and Yorkshire/Humberside.
