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People who live until they are 100 may need \u00a3638,000 in savings to pay for their retirement – and ever more people are living to this age.<\/p>\n
Researchers at Evelyn Partners found those who have worked in white collar jobs and had a healthy lifestyle may live well into their 80s, 90s or beyond.<\/p>\n
Lucie Spencer, director in Financial Planning at the group, said: \u201cEven someone waiting until the state pension age of 67 to retire could quite easily need 25 years of pension income.<\/p>\n
\u201cAnd this is a crucial matter, as obviously no one wants to spend their later years in strained financial circumstances or in ill health.<\/p>\n
\u201cAnd while the latter is partially out of our control, it\u2019s not entirely unrelated to financial security and the comfort \u2013 both physical and mental – that sufficient savings can provide.\u201d<\/p>\n
READ MORE <\/strong> Key change to PIP and Universal Credit health assessments<\/strong><\/p>\n The number of people aged 100 and over hit a record high in 2021, reaching 13,925, with the count more than doubling since 1991.<\/p>\n Ms Spencer said people should consider that their costs may increase over their retirement. She said: \u201cWhile some outgoings might moderate in the later phase of retirement, others such as care, medical and heating costs could place a greater demand on incomes.<\/p>\n \u201cWe would encourage the young and middle-aged workers of today to think carefully about the prospect of living well into their nineties.\u201d<\/p>\n The group based its calculations on figures from the Pensions and Lifetime Savings Association.<\/p>\n Don’t miss… <\/strong> The association states that a single person needs \u00a337,300 a year for a comfortable standard of living in retirement while a couple need \u00a354,500 a year.<\/p>\n Ms Spencer said: \u201cToday\u2019s workers need to take personal saving towards retirement very seriously, if they are not to risk a big drop in their standard of living – particularly given the ongoing uncertainty over the affordability of the state pension and triple lock in their current form.<\/p>\n \u201cIf we look at an annuity to provide that \u2018comfortable\u2019 level of income, then recent quotes are coming in at about \u00a3443,000 for a single life, good health annuity at age 67 that increases at two percent per annum but with no other guarantees – which means a pot of \u00a3591,000 if the tax-free lump sum was taken in full.<\/p>\n \u201cThis reflects the greater value that lifetime annuities can provide for those who live well beyond average life expectancy.\u201d<\/p>\n We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info<\/p>\n Another issue is how much inflation could hike the rising costs of retirement. Evelyn Partners based its figures on a two percent rise in inflation each year in line with the Bank of England target but it could be higher.<\/p>\n Ms Spencer added: \u201cIt\u2019s widely suspected that the rate could remain above that in the medium and even the long term, so that drawdown pots risk being depleted more rapidly unless investment returns can compensate.<\/p>\n \u201cMoreover, the rate of inflation for those aged 80+ is likely to be higher than the average due to the make-up of the basket of goods and services that they tend to consume.<\/p>\n \u201cIncreases in care home fees and heating costs, for instance, tend to have a higher impact on people over age 80.\u201d<\/p>\n For the latest personal finance news, follow us on Twitter at @ExpressMoney_.<\/b><\/p>\n
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