Life expectancy in the UK has increased by more than ten years since 1950 and continues to grow by approximately two years each decade, according to the DTI.
Another dramatic find is the increase in early retirement, with far fewer people working into their sixties than was the case forty years ago. Below 30% of men now work between the ages of 60-64, compared to a previous statistic of 70%.
Obviously, as a consequence, the total number of years spent in retirement is on the increase. However, will people have the financial resources to provide them with a comfortable lifestyle for what is likely to be a quarter, or even a third, of their life?
Unfortunately, the statistics are not encouraging. The Sandler review highlighted the fact that the population is not saving enough for retirement. The average vested pension in 2000 was just over £30,000, an incredibly small amount to be relying on to provide an income throughout retirement.
The government argues strongly that conventional annuities offer good value for the majority of purchases. Why do conventional annuities offer such good value? An income for life - guaranteed income, regardless how long you may live. Mortality cross subsidy - the capital invested by people who do not live as long is used to subsidise income for those who live longer than expected.
If you require more information about annuities, please contact us either by email at or telephone us on (01543) 677444.