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29 Nov 2017

Over-50s underestimate life expectancy by up to eight years

Eight out of ten people (78%) over the age of 50 are significantly underestimating how long they are likely to live, according to research by Retirement Advantage.

The company warned that many people could be left without sufficient income if they underestimate their years in retirement, as the pension freedoms have made it easier for savers to access their pension pots and spend the money early.

A survey showed that men approaching retirement age underestimate life expectancy by average of six years, while women underestimate by an average of eight years.

Both men and women aged 50-64 on average guessed their life expectancy to be 82 years old. However, official statistics reveal that the average 50-64 year old man will likely live to 88, while the average 50-64 year old woman is expected to live to 90.

Andrew Tully, pensions technical director at Retirement Advantage, said: “Planning for retirement can be a complicated business and no one knows how long they will actually live. The pension freedoms have given people the opportunity to plunder pension pots early, often before planned retirement ages. This is potentially storing up trouble for the future, especially if people are underestimating how long these pensions need to last in retirement.”

Tully stressed the importance of getting proper financial advice about your financial options for retirement.

“An adviser can make a plan for your personal retirement journey which considers all the risks at play, whether that be investment risk, or the risk of living longer than you may have expected.”

Copyright © M2 Bespoke 2017

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