- A fifth (19.1%) of girls and 12% of boys born in 2024 are expected to live to 100, according to ONS data released today (source: Past and projected period and cohort life tables – Office for National Statistics)
- This is expected to rise to 26.3% of girls and 18.3% of boys born in 2049
- A girl born in the UK in 2024 has a life expectancy of 90.2 years, and boys 86.9 years – but by 2049 it’s expected to reach 92.4 years and 89.6 years respectively
- Women reaching age 65 in 2024 can expect to live another 22.7 years and men 20 years, increasing by around 2 years by 2049 – it was 20.4 for women and 17.6 for men in 1999
- How to future-proof your finances for a longer life expectancy
Sarah Coles, head of personal finance at AJ Bell, comments:
“Planning the perfect income in retirement is like assembling Ikea furniture: when there’s a key piece missing, it doesn’t matter how much you put into it, you’re never going to be able to rely on the end result. For retirement, the great unknown is how long we can expect to live, and new figures will hopefully help a bit.
“The ONS has put together a life expectancy calculator which uses your age and gender to estimate how long you might live. It’s a fairly blunt instrument, because it doesn’t take into account how and where you live and your current state of health. However, it’s more advanced than using average lifespans right now, because it factors in possible improvements in life expectancy during your lifetime.
“The figures should be good news, with one in five girls born in 2024 making it to 100 and the average woman making it to age 90. Boys tend to have shorter lives, but even then, more than one in ten will make it to 100 and on average they’ll make it to just shy of 87. For those getting close to retirement and planning how to take their pension income, there are long retirements to look forward to. The average woman reaching 65 should make it to 87 and a half, and the average man to 85.
“It means pensions need to last for decades and deliver the kind of income you need at each stage of your retirement. It's worth exploring your life expectancy, so you can get the final piece of your financial planning in place. Of course, these are only averages, so it’s also worth planning your retirement based on the nice surprise of living longer than you expected.
Planning for longer
“It’s worth using a pension calculator that helps you see not only how much of a pot you can build by retirement, but also how long that pot might last based on the income you expect to need. It will help you see whether there are any shortfalls you need to make up before you hit retirement, through either higher contributions, changes to your investment strategy, or a mixture of both.
“You also need to think about how you plan to take an income. Some people will value having a guaranteed income for life above all else, so they may opt for an annuity. If you take this route, it’s vital to consider the impact of inflation on your spending power. You can use an inflation-linked annuity to manage this, but the initial income will be much lower.
“Others will want to have the biggest possible income, with the flexibility to keep pace with inflation, so they might opt for income drawdown. Some will plan to spend their pension down to the end of their life, to maximise their income and make the most of everything they have put aside for the future. Others will want to guarantee their pension drawdown pot lasts for life by just taking the natural yield from their investments. This is where you take the income from dividends produced by your investments, so you don’t eat into the capital itself.
“Many people will want the best of both worlds, so they have some guaranteed income to cover the basics and the flexibility to use drawdown for the extras that make retirement more enjoyable. It’s one reason why people often combine annuities and drawdown, either at the same time or at different stages of life.”
