Pensions and living longer
The number of people aged 100, or over, has quadrupled over the past thirty years according to the Office for National Statistics.
The number of people aged 100, or over, has quadrupled over the past thirty years
While this is good news, the longer you live, the more money you need to fund your lifestyle throughout the whole of your retirement. This has had a big effect on pensions, both state and private.
The income paid out to today's pensioners by the state, is funded by those who are working now. As the proportion of people over State Pension Age grows, the more expensive it gets.
To help counteract this, the government is changing the age at which you can claim State Pension. It is currently 65 for men. State Pension Age for women is gradually increasing from 60 and will reach 65 by November 2018. State Pension Age for both men and women will then increase to 66 by October 2020. The State Pension Age will increase from age 66 to 67 for males and females between 6 April 2026 and 5 April 2028. The government will continue to review state pension age - taking into account all relevant factors including life expectancy, so these ages could change.
Increasing life expectancy has also had a major effect on the amount of income paid out by annuity providers. Because the money saved up by individuals will have to last longer, you'll need to build up a larger pot of money to provide for your retirement, or work longer. It's therefore important to think ahead about how you can make the most of your potential income.