Retirement: How are Longer Lifespans Affecting Pensions?

With more people living longer, pensions and savings are being affected for those who are planning for their retirement.

By 2020, the Office for National Statistics predicts that people aged over 50 will constitute one third of the working population. This will inevitably have an impact on the way savers plan for their retirement, as it’s likely they will have to cover living costs for a longer period of time with their pension and investment income.

What is the impact on pensions?

Longer lifespans mean longer time spent in retirement, meaning many people may find it difficult to accurately predict how long their pensions will need to last. This could result in people underestimating how long they will live, and potentially running out of money in the future.

As well as this, due to the average lifespan extending, it may not be within a person’s plan to account for potential, unexpected costs in the future, for example nursing care costs and support for children and grandchildren. This can have a major impact on pension pots, as individuals who do not take into account the costs that come with a longer lifespan may not have enough to live as comfortably as they would like.

How will this affect retirement planning?

When planning for retirement, it’s important to think carefully about how long you will need your pension pot to last, as well as any potential unexpected costs that can arise. It’s important to be aware of the risks that come with retirement planning, as well as explore all the options that are available to you.

What next?

If you’re looking for help investing for retirement and retirement financial planning advice, contact our local financial adviser team today. Please call on 01926 492406 or email us at enquiries@klofinancialservices.com to make an appointment.