More than 80% of UK adults approaching retirement have unrealistic expectations of how long they will live, a pension income specialist firm has revealed today.
In a poll of over 2000 people, men aged between 55 and 64 estimate their average life expectancy to be 81 years and women in the same age group estimate it to be 79, said MGM Advantage. It found that both men and women were underestimating how long they would live by an average of five years and ten years, respectively.
The poll also showed that 79% of males underestimate their likely longevity compared to 85% of females.
MGM's marketing director Aston Goodey said it was important that people had realistic expectations of how long they are likely to live so they could make adequate provision for retirement.
'The chancellor's Budget changed the pensions' landscape forever, allowing people more freedom and choice with their pensions. With increased choice comes the risk that individuals may live longer than they anticipated meaning they may outlive their retirement savings.
'This could lead to a decline in living standards and may come at the exact point [when retirees would] need regular income for things such as care fees.
'The reality is simple, there is no other product in the market that offers such a high rate of return for life than an annuity.'
Last week, at a policy conference in London pensions minister Steve Webb urged the insurance industry to 'pull down the curtain between pensions and long-term care'. He identified the relationship between care and the Budget proposals for insurers to develop new and innovative products.
'Maybe in this brave new world we could integrate thinking about those two things,' he said.