I read an article in the Financial Times (FT) at the weekend, that said retirement could last 20 or even 30 years for tomorrow’s pensioners as, according to estimates from the Office for National Statistics (ONS), one in three of today’ babies will live to see their 100th birthday.
The number of centenarians has more than quadrupled over the last 30 years from 3000 in 1983 to 14,570 in 2016, due to improvements in healthcare and changes in lifestyle, such as a reduction in the number of people who smoke. And as a result, according to the FT, the government has expanded the team sending 100th birthday telegrams from the Queen. Yes, we are also disappointed to find out that she doesn’t do this job herself!!
And women are more likely than men to reach this milestone!
Whilst surely this is good news, as long as we can enjoy our twilight years, it means that the state pension age is increasing. We discuss this in more detail in our article ‘Can you afford to retire’ later in this newsletter. But essentially, this means that we all need to make more of our own provision if we want to be able to retire at an acceptable age and in the style we’d like – especially us ladies!
So, the answer is to get saving – and start as soon as possible.
Of course cash isn’t the only option for people to consider – but for those who do want to stick with this asset, it’s important to make it work hard by choosing the best accounts and to be as tax efficient as necessary.
That old stalwart, the Individual Savings Account (ISA) used to be the go to product for tax savvy savers but recent government initiatives, such as the Personal Savings Allowance, coupled with a drop in the ISA rates on offer over the years compared to non-ISA accounts, have seen a decline in their popularity. But once again, challenger banks to the rescue. ISA rates have been improving as more of these new providers have started to offer ISAs – let’s hope this will continue. For more information on ISAs and the options available read our article ‘ISAs explained’ below.