Insurers have pounced on Office for National Statistics data showing increased average longevity for people across the UK, pointing to the increased need for their various pension and protection products.
The ONS reported in the last 10 years, life expectancy in England and Wales for those aged 65-years-old has increased by nearly two years for both men and women.
During the period from 2011 to 2013, life expectancy was slightly greater for women than men at the age of 65.
For men at the age of 65, life expectancy was highest in Harrow (21 years) and lowest in Manchester (16 years).
For women at the age of 65, life expectancy was highest in Camden (24 years) and lowest in Halton (19 years).
Data also showed that at the age of 65, men and women in the UK are expected to live over half of their remaining lives free from disability (53.2 per cent and 58.5 per cent for women and men, respectively).
A spokesman for LV commented that the news that people are living longer in good health is welcome news and serves to highlights the importance of financial planning.
“When it comes to protection, sales of life cover outstrip those of income protection, yet someone is more likely to be off work for more than two months than suffer a serious illness die before they retire.
“With more and more people working beyond state retirement age, it is important that they have the relevant protection in place to meet their needs. It is also worth savers thinking about the length of time they may spend in retirement to ensure that they are saving enough to fund a comfortable lifestyle once they leave the workplace.”
The insurer’s spokesman added: “However, it is vital that when someone approaches retirement they make the most of their pension fund by considering all the income options available.
“For those retirees who want a guaranteed income, certainty that they won’t outlive their pot and the potential for future growth, an investment-linked annuity may well be the right product for them, but we would always recommend that they shop around to find the solution or combination of solutions which offer them the flexibility they need.”
Stephen Lowe, director at Just Retirement, said that although the government is planning to give retirees average life expectancy information, most people recognised that their personal life expectancy was likely to be very different.
“As an individual, you can’t put a figure on it; just by living another day your life expectancy goes up. That makes us question the usefulness of life expectancy averages unless presented very carefully.
“They may be useful if you are making policy for large groups of people, but are useless at an individual level, especially where it would be a financial catastrophe to run out of money at a vulnerable age.”
peter.walker@ft.com
