Pensions and savings threatened by increased life expectancy

18 April 2008 / by Rebecca Sargent
Middle aged men and women today have a 50 per cent chance of living into their 90s, but this increased life expectancy could pose serious financial issues.

According to statistics from the Life Trust Foundation, more than half of all pensioners are currently living below the poverty line, and with increased life expectancies this number is expected to rise.

The Life Trust Foundation is keen to raise awareness of the financial issues that are associated with increased longevity of life and encourage innovation from individuals and institutions to help society deal with the financial impact of increased life expectancy.

Chairman of the Life Trust Foundation, Lord Hunt of Wirral, said: "Many people simply do not realise the scale of the financial impacts associated with increasing longevity, and it is precisely this sentiment that lies behind the Foundation’s formation.

"We are today pledging to take a leading role in providing people and institutions with the knowledge they require to face up to the fact we are living longer. This is not an issue which is going to go away, and we want to play our part in diffusing the ticking time bomb of longevity."

As the credit crisis takes hold, Britons are struggling to find spare cash at the end of the month and as a result, pension and savings contributions are suffering. A state pension will, at the moment, provide between £21.83 and £148.14 a week, depending on your circumstances and contributions.

Having just a state pension can result in pensioners living below the poverty line and, according to the National Association of Pension Funds, it is not possible to generate enough wealth by working from 25 to 55 to enable people to live comfortably until they are 95.

The Life Trust Fund is urging people to consider increased life expectancy when planning for the future; savings accounts and additional or private pension contributions are encouraged. Director of the Life Trust Foundation, Mike Lake, said: "A person aged 55 today has a one in two chance of living to 90 and a one in four chance of living to 95. The fact is that the UK’s population is growing older by the day – we are all, on average, living longer.

"More than ever we need to be aware of the implications of living a long life, and a vital part of this is for people to consider their longevity hand-in-hand with their future finances.”

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