The cost of retirement is rising as longevity increases, according to Life Trust Insurance's Cost of Retirement Report released today; retirement currently costs the average UK household £413,000, but this could soon rise.
The report issued a forecast of the amount of money a person would need to fund a retirement in the UK if they were to retire at 65. However, this prediction is made against the current average life expectancy of 85 for a man and 88 for a woman, and these ages are set to rise significantly.
And, according to Life Trust, the average life expectancy age is misrepresentative of the real chances of people living to an advanced age. The report stated that someone who is 55 today has a one in four chance of living to 95 and a one in 10 chance of making 100.
As it stands, the cost of retirement for someone living alone is £326,700 but if a person lived to 100 this could soar to an average cost of £708,500, highlighting a need for Brits to start investing in their pension
The report also indicated that the cost of retirement is not immune to inflation and warned that if inflation remained at its current level, the cost of retirement could easily hit £1million.
Andy Briscoe, CEO of Life Trust, commented: "People are living longer, healthier lives. This is great news but only if people have the finances in place to really enjoy their post-career years. The combination of rising life expectancy and the impact of inflation over time can have huge financial implications, and this report allows us, for the first, to see the scale of these trends."
Speaking of the reasons behind the report and the need for adequate retirement planning
, Mr Briscoe said: "With more and more people reaching 90 and beyond, and with 90 becoming the new 70 in terms of healthy ageing, it has never been more necessary for the industry and individuals to understand the true cost of modern retirement."
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