Live longer, and wealthier
Not only will you probably live longer than your parents, but your children and grandchildren will likely live longer lives still.
That’s according to data published by the Office for National Statistics. The cold, hard estimates show that the number of Brits reaching the age of 100 has quadrupled in the past 30 years. What’s more, it could do so again by 2035.
What this means for all of us is that proper planning for retirement is all the more important, especially if you want to live comfortably in
your later years.
It’s not always been this way. The vast majority of people used defined contribution pension schemes to buy an annuity, giving them a guaranteed income for the rest of their lives.
‘The pension reforms that took effect in April 2015 changed all of that,’ says investment manager Baillie Gifford. ‘They gave investors far greater choice and flexibility at retirement, leaving annuity purchasers in a minority.’
Individuals could be retired for more than 30 years. This means decisions need to be made in order to strike the right balance between income and capital preservation.