Living longer changes everything. But are we planning for it?

Later life isn’t something we picture in spreadsheets. We think about far nicer things, like finally going on that bucket list holiday, learning watercolour painting, walking the dog on a Tuesday morning instead of rushing to work, or having the time to really enjoy days out with the grandkids.

Living longer makes this all possible, and that’s one of the world’s biggest success stories. Children born today can expect to live well into their late eighties or even nineties, which is something worth celebrating, but it also changes the way we think about work, retirement and financial security.

A recent House of Lords report, Preparing for an ageing society, points out that retirement planning hasn’t kept pace with how long people now live or how varied later life has become.

One of the report’s key findings is that the state pension age won’t solve the problem. By the time many people reach their mid-sixties, they’ve already left the workforce, often because of health issues or caring responsibilities and delaying access to the state pension leaves them exposed in the years before retirement income properly begins.

The report also challenges the idea that immigration or higher birth rates will provide an easy fix. Instead, much of the focus is on whether people in their fifties and early sixties can stay in work if they want to, and whether they’ve built up enough private provision to give them real choices later on in life.

The state pension was never designed to fund a long retirement on its own. It provides a foundation, but for most people it won’t deliver the lifestyle they want. Yet, many still underestimate both how long they might live and how much those extra years could cost, particularly once inflation, health, and changing care needs are factored in.

Another theme (running through the report) is financial understanding. Evidence suggests that many people don’t properly engage until it’s too late to make any real difference.

Longer lives also mean careers are likely to look less linear than they once did. Fewer people will move straight from school or university to full-time work and then stop abruptly at a fixed retirement age. Phased retirements, part-time work, career changes and breaks are becoming more common, and financial plans need to reflect that flexibility rather than assume a single retirement date followed by decades of inactivity.

For younger generations, the implications matter just as much. Living longer means saving for longer, but it also means planning money and careers across a longer life span. Decisions made in your thirties and forties increasingly shape how much freedom you’ll have in your sixties and seventies, whether that’s around work, lifestyle or when and how you retire.

“When you are younger the vision to plan for decades can provide you with the freedom and flexibility to retire on your own terms. The planning aspect becomes increasingly important as we get older and we need more clarity around our options and confidence that our plans in retirement can be achieved”

Said Andrew Gilmore Chartered Financial Planner

“Interestingly, in our most recent quarterly client survey, 34% of respondents actually said ‘making pension planning a priority’ would be the number one piece of advice they would give to their younger self and this really is excellent advice”

Source:

https://committees.parliament.uk/committee/175/economic-affairs-committee/news/211034/uk-strikingly-unprepared-for-an-ageing-society-facing-increasing-costs-and-shrinking-tax-base/