State Pension Age Set To Rise To 70 By 2050

Financing retirement is likely to become even harder as life expectancy pushes up the likely state pension age to 70 years old by 2050.

The Office of National Statistics has released new data from 2010-12 – the latest figures available – suggesting boys born then will live until they 79 and girls until they are 83.

And a fifth of boys and a third of girls will survive into their 90s.

The data is supplied to the government and financial firms so they can calculate the state pension age and longevity for life insurance and private pensions.

With most people approaching retirement now giving up work in their early to mid-60s, the data seems to show that more of us will spend around a third of our lives retired.

Savings pressure

That suggestion puts an enormous pressure on the state pension and personal saving to provide enough money to pay the bills and enjoy a few luxuries after the working life ends.

Recent changes in pension saving have moved expectations away from a two-thirds final salary workplace pension because employers find them too expensive to fund.

Instead, retirement savers have to rely on the vagaries of the stock market to give them the money they need when they leave work – and this is a lottery that depends on the price of stocks and shares.

Retire during in a recession and savers will see huge sums slashed off their fund, while those retiring in a market upcycle are likely to see more cash in their retirement kitty.

Financial regulators are warning many over 55s who can now access their pension cash as they wish under flexible access are wasting their savings by trying to invest in risky high-return schemes or buy to let property.

Bleak future

Recent research by financial firms also shows many over 55s are taking cash from their pensions to stash in a bank or building society, where they are likely to see a much diminished return compared to an investment fund.

Tom McPhail, head of pension research at investment platform Hargreaves Lansdown, said: “Savers have to change their thinking and spending habits so the money they gather during their working life is spent more wisely over a longer period.

“It’s tough for families who have to think about housing and bringing up children, but many pensioners who spend today and worry about tomorrow when it comes are likely to have a bleak financial future.”

Below is a list of some related articles, guides and insights that you may find of interest.

Questions or Comments?

We love to get feedback from our readers. So, after reading this article, if you have any questions or want to make comments, send us a message on this site or our social media?

Leave a comment