The over-50s are underestimating how long they will live and are over-optimistic about how well off they will be in their retirement, particularly given the low annuity rates on offer, new research by pensions experts has warned.
A report by the Institute for Fiscal Studies, supported by the National Association of Pension Funds (NAPF) found that women in their 50s are undershooting their life expectancy by around four years, predicting 84 instead of 88, while men are doing so by around two years (stating 83 instead of 85), when compared to national projections of life expectancy.
The report showed how the over-50s are facing the blessing of rising longevity with the need to make adequate pensions provision, particularly when their pension is the âdefined contributionâ (DC) type that is replacing final salary pensions in the private sector.
Joanne Segars, Chief Executive of the NAPF, said:
âFortunately, people are going to live longer than they think, but they are not planning for it, so they might find their savings and pension do not stretch far enough.â