Lifestyle changes mean that people are now taking up to seven years longer to reach various milestones - leaving home, marrying, buying a house and starting a family - than they did 30 years ago. Aviva is therefore warning that people need to start planning for their retirement sooner rather than later.
Forever mortgages - The average first-time buyer is 34 years old. If current trends continue, by 2039 the average first-time buyer would be 41 years old. With an increasing number of providers currently offering 40 year mortgages, paying off a mortgage at 80 years of age could become a common phenomenon.
Later retirement - The average age of retirement is steadily creeping upwards. Although average retirement is just over 64 years for men and nearly 62 years for women, changes in state pension allowance will mean that by 2046 state pension age will rise to 68 for both men and women, forcing people to work for longer before they are able to draw a state pension.
Offspring staying at home - With the average age of a first-time buyer increasing, there is a steady increase in the number of offspring choosing to live at home later in life. More than a quarter (29%) of young men (aged 20-34) are living with their parents, a figure that has grown by 300,000 people since 2001.
Darren Dicks, head of annuity propositions for UK Life, Aviva said: “There is a risk that without forward planning, today’s young adults could end up in a work-to-live cycle for what feels like ‘forever’. Without suitable pension provision and a means to pay off their mortgage before retirement, people could find themselves having to work for much longer than they do now.
“And if people have children in their 40s who then live with them into their 30s a trend which is currently growing people could be supporting their ‘children’ well into what has traditionally been a time to retire and relax.
“On a more positive note, life expectancy is also increasing steadily, rising from 82.8 and 86.8 respectively for men and women born 30 years ago, to 88.5 and 91.8 for people born now. So even though people are working longer, they are also living longer in retirement. This underlines the importance of planning ahead and preparing for a long life.”
Aviva has also unearthed the following ‘Forever Generation’ statistics:
The number of women having children over the age of 40 has increased by more than four times in the last 30 years, from 6,000 per year to 25,400 now.
Babies born in 2039 are predicted to have a life expectancy of 92.3 years (males) and 95.1(females)
