Just Retirement completed the research among 35 to 64 year olds to gather their attitudes towards life expectancy and retirement funding.
It highlighted the difference (seven years) between the age at which people want to retire and the age at which they expect to retire, with 61% believing that the retirement age will rise to 70 or higher in the next 20 years and 68% believing they had not paid enough into their pension schemes.
Key research findings are:
- The average life expectancy for a man aged 65 is believed to be 17 years (82).
- The average life expectancy for a woman aged 60 is believed to be 25 years (85)
- The Government Actuary’s Department cohort expectations show that a man aged 65 has an average life expectancy of 84 and a woman of the same age has an average life expectancy of 87
- This currently means that most people believe they will have to provide funding for between 17 and 25 years of retirement but may well have to fund up to 27 years or even longer
- 68% believe they have not made sufficient contributions to their pension schemes
- 90% of those polled believe that, in order to fund retirement, people will have to work longer, save more and find other methods of funding
- 61% believe the retirement age will rise to 70 or higher in the next 20 years
- 78% believe they have little or no influence over their life expectancy, despite the fact that over 90% believe that life expectancy is influenced by factors such as taking drugs, smoking, alcohol consumption, quality of diet and exercise
These results show an increasing awareness of the issues facing the majority of people — particularly those retiring now. In 2004 the average maturing pension fund was only £26,000, after the withdrawal of tax free cash. These people are facing the twin problems of small funds and increasing life expectancy.
Advisers in this arena have significant business potential as a result of both the increasing awareness and the growing numbers of people facing these problems. The Just Retirement survey shows there is a definite demand for holistic financial advice. Advisers need to find more creative ways to fund their clients’ longer retirements without jeopardising the security of their funds.
Nigel Barlow, marketing and product manager at Just Retirement, commented: "It is clear people are becoming more aware of the issues they face surrounding retirement provision. The fact that they need to investigate all methods of providing for themselves financially, including using their home as an asset or even retiring later points to a potential boost for the equity release market and a resulting boost for advisers who can see the broader picture in this area."
