Those born between the mid 1960’s and early 1980’s are underestimating their life expectancy by around ten years.
This is according to research from Just Group, which revealed that millions of pensioners in the so-called ‘Generation X’ are approaching retirement without a realistic idea of how long their savings will serve them in relation to life expectancy.
Whilst the findings showed that women between 40 – 54 anticipated to live to around 80.5 on average, the forecast showed that they’re more likely to live to around 90.1 years. For men, the life expectancy stands at around 87.5, almost a decade higher than their prediction of 78.6.
Commenting on the results was Stephen Lowe. The group communications director at Just Group said:
“Nearly a million members of Generation X are set to arrive at age 55 every year for the next decade or so and will face crucial decisions about whether to take pension money or leave it to keep growing. Without a realistic idea of how long they will need that pension fund to last, it will be very difficult to make an informed decision.
“With the amount of money now being accessed from pension funds before State retirement age, particularly modest ones that could grow to a decent size given extra contributions and a bit more time, many people already seem to be making decisions their older selves are going to regret.
“You can understand the temptation of taking cash out of the pension but each pound taken early on might mean perhaps two pounds less a few years later when money is tighter. As it stands this generation is almost certainly going to need to work to greater ages than before, but that depends on the jobs being available and them being healthy enough.
“The timing is not all bad for them because they have ridden the property price rises and it is likely some of that equity built up will need to be extracted later – through downsizing or equity release – to help pay the household bills or bigger sums to finance care costs.
“Longevity is unique in that it depends on a multitude of factors such as your own genes, health and lifestyle. Before taking pension money, people need to get more informed by taking the free and impartial government guidance from Pension Wise or seeking professional advice because bad decisions early on can have a huge effect on how comfortable you are in later retirement.”
