Savers have been warned by pension experts to think about how long their retirement savings will last, as life expectancy continues to grow - albeit more slowly than in the past.
Data from the Office of National Statistics, released on Thursday, show that life expectancy in England, Scotland, and Wales has grown again, rising by an average of 6.8 weeks compared to 2016-2018.
This is a slower rate of growth than has been recorded over the past five years, and some may consider the change to be modest.
However, some experts have warned that pension savers could suffer in later life if they fail to account for the general trend in living longer and the growing length of time they will need to rely on savings.
Speaking to the Financial Times, Stephen Lowe, Communications Director of retirement financial services provider Just Group, cautioned people to think hard about the sustainability of their income in retirement and plan their money 'to take account of physical and mental decline".
According to the ONS report, the average life expectancy for women increased at a faster rate than for men in some parts of the country, such as the North East and North West.
Compared to their male counterparts, the average life expectancy for women living in these regions grew by 15 and 17 weeks, respectively, compared to just 11 weeks and 12 weeks for men.
Yet women still consistently put less money towards their pensions than men. According to Scottish Widows' annual Retirement Report, in 2019, only 57% of women were saving adequately for a comfortable retirement, compared to 61% of men.
Typical savings rates (as a share of income) have increased faster amongst men. The result is that while men and women were typically saving the same share of income 15 years ago, men are now saving around 1.5% more of their income. Our modelling suggests that the typical young woman today could end up with a retirement pot £78,000 smaller than that of their male counterparts. That sizeable gap could translate into nearly £3,000 less in income each year of retirement.
AJ Bell Analyst Tom Selby pointed out regional differences in the data, which suggest that savers should think carefully about their own circumstances when planning for retirement, instead of using a 'one size fits all' approach.
It is worth noting that while overall life expectancy might have been improving, how long you can expect to live depends heavily on a variety of factors, including where you live. For example, the gap between the region with the highest average life expectancy at birth, Westminster, and the region with the lowest life expectancy, Blackpool, was over ten years. More generally, there remains a clear disparity between the life expectancies of people living in London and the South East and less affluent regions such as the Midlands and the North East.
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