/ Money

Can you afford to live to 100?

Lots of birthday candles

Of today’s population, more than 10 million are predicted to reach 100 years old. Should we be happy at the prospect of getting a royal telegram, or worried about who’ll look after us and how we’ll cope financially?

Of the people you encounter today, how many do you think will live to 100? Obviously, it depends on how old some of them are right now. But according to the Department for Work and Pensions (DWP), more than you’d think are likely to clock up a three-figure final score before shuffling off this mortal coil.

Apparently 10 million of the people wandering around the UK at this very moment will make it to 100, with many under-16s even likely to celebrate 110 birthdays or more.

As a science fiction fan, I find this fascinating: will the oldies of the future have robotic Zimmer frames, computerised cures for forgetfulness and pills to preserve perfect eye sight?

Whether your knee-jerk reaction to the thought of living to 100 is excitement or horror, one thing’s for sure: our ageing population will have a profound impact on the welfare state, and the extension of the average lifespan has huge implications for both individuals and families.

‘45 years of retirement’

Alliance Trust Savings, an investment company that provides pensions and stocks, says the DWP’s research should spur people to consider how they’ll fund their long future lives.

Assuming most will still want to stop working at 65, Alliance Trust points out that those of us who live as long as 110 years will need nest eggs big enough to see us through 45 years of retirement! While I can’t see 65 remaining the ‘default setting’ for retirement – especially given the government’s intention to raise the state retirement age to 66 by 2020 – this is certainly food for thought.

As far as the welfare state is concerned, taxpayers are already groaning under the weight of supporting a population that is becoming steadily more imbalanced as older people live longer, and younger people have fewer children.

Personally, I’m a big believer in the NHS and the importance of decent old age pensions for all – but the question of how we’ll continue to fund them is a difficult one to tackle.

The self-preservation society

In the absence of a clear solution, it seems we’ll have to get better at thinking ahead for ourselves and our families.

I know some people are acutely aware of the need to save for retirement and have pensions and Isas coming out of their ears. But the reality is that millions of Britons have no savings at all, and plenty of employers still don’t offer pension schemes.

It’s hoped that the introduction of NEST in 2012 will encourage more people to invest for their retirement. Alongside this, I think we’re all going to need to confront not only our own mortality, but our likely longevity: the fact that we’ll need to plan more carefully, and put more money by if we want to make sure we can live comfortably in later life.

It’s this uncomfortable truth that, for me, rather takes the fun out of the thought that I might become a ‘centenarian’. Imagining myself on some sort of sci-fi hovercraft mobility scooter is fine – until I start contemplating who will have to pay for it.

Comments
Admin

I’m with you Laura. Saving for retirement is already a scary-enough prospect without the thought that we might need over four decades’ worth of cash stashed!

Just how exactly is the average person supposed to save that kind of money? Interest rates are appalling, so ISAs aren’t much help, and jobs for life are non-existent, which make proper pension planning quite hard. I find it all quite depressing really!

Admin

I wonder if we should be taking out insurance to provide an income if we do live to a grand old age.

The trouble is that payment might be declined for anyone who who had failed to declare that they were not overweight or did not have a family history of heart trouble!

Admin

When I first started work at the grand age of 15 it was unheard of for healthy, young, able-bodied people to be on benefits.. These days it is the norm for many. Therefore, it’s no wonder the pensions pot is getting smaller. If the younger generation are not contributing then eventually the pot will run dry. There are too many taking out without having put anything in.

Admin
Garry Dixon says:
1 June 2011

No one should reasonably expect to be in education for 21 years, in work for 45 years then in retirement for 30+ years. If you are fit enough to live to a grand old age, you are fit enough to work for longer. You certainly shouldn’t expect the younger generation to keep you. They will have enough to do keeping themselves.

Admin

Anyone would think we had no problems keeping ourselves and still caring for those who had done their bit. And this preposterous idea that the younger generation are ‘keepig’ the pensioners of today is (almost) laughable. We may, if God wills it, have along old age and many of us will struggle as pensions depreciate and everything else escalates. And another thing, we are still paying tax or do you think the government has let us off the hook because we have turned 60/65?

Admin

“Assuming most will still want to stop working at 65, Alliance Trust points out that those of us who live as long as 110 years will need nest eggs big enough to see us through 45 years of retirement! While I can’t see 65 remaining the ‘default setting’ for retirement – especially given the government’s intention to raise the state retirement age to 66 by 2020 – this is certainly food for thought.”

We should also reflect upon the fact that many of us who planned carefully and made adequate provision for our retirement, even contemplating living to 110, were subsequently cheated and our careful planning put in jeopardy by this governments pernicious and dishonorable device of changing the indexing of state and public sector pensions from RPI to CPI. If you were already retired when this mischief came into being then there was no means by which you could take any corrective action.
It really doesn’t matter how much you save or how carefully you plan if you subsequently get swindled by a change in the rules which you could not have anticipated.
Rather than save harder we should use our vote at the ballot box to overthrow this dishonorable government.

Admin

I am fast approaching 70 and the thoght of living to 100 is most distasteful. If someone had told me 40 years ago how well I would feel and what I could not do at this age I would not have been keen on living this long although I appreciate that as you get older living with minor? inabilities becomes the norm. I feel that the health service sometimes keeps people alive when they might well prefer to pass peacefully away. Vast sums of money are spent keeping people alive for another year, sometimes even less and for someone of my age or older this does not seem the wisest course. Quality of life and lack of pain is surely where the emphasis should be, not just on maintaining life at all costs.

Admin
Steve says:
4 June 2011

I’ve been paying into a private pension since 1986. After the ‘greatest Chancellor of all time’ Mr Brown raided out pensions, many people like me are left with substantially less than we should have had. With nothing to protect us from political ineptitude, there is little incentive for people to put into pension funds. Such funds are only as good as the people investing them. Remember the other Labour Party visionary Robert Maxwell???