How long is longevity?
03 January 2025Financial planning is a fascinating profession, working with clients, with their plans, and with their financial assets to help them achieve their goals and aspirations.
There is a saying that the only two certain things in life are death and taxes, and perhaps the latter of these two has been more in focus than ever over recent months. Of course, knowing when you will pass would make pension and financial planning a lot easier to ensure that your funds last as long as you do, or that they can be passed on through inheritance. As an example, income drawdown pension funds introduced great flexibility in the way pension benefits could be accessed around a decade ago, but also imported the risk that the accumulated pension funds could run out. Topically, pension annuity rates are far more attractive now than they have been for many years, although the advantage of secure income is in part offset by the loss of pension capital. Plus, as noted above, you may not live long enough to get your money back.
This raises the question as to how long is longevity as an average?
According to recent population projections from the Office for National Statistics (ONS), a woman reaching age 66 this year, 2024, is likely to live to age 87 as an average. For men, the average age is 85. More on the data can be found in the following link:
This is a significant increase from past generations; however, this is the average age with, as you would expect, some dying before this average age point, and some living significantly longer. Helpfully, or rather starkly, depending on how you view it, the ONS has a calculator of life expectancy on its website based on your current age and sex. The calculator suggests average life expectancy, but importantly also provides the odds of living to age 100. More can be found here: https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/lifeexpectancycalculator/2019-06-07
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Time and ageing are a constant in our lives, and the age range you fit now will continue to evolve, as will your needs, objectives and requirements. Financial planning is part of the process in helping to achieve your goals or managing expectations as to what funds can be used when and where to help you and your loved ones on life's journey.
No individual advice is provided during the course of this blog.
Keith Churchouse
Director
CFP Chartered FCSI
Chartered Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899
