A slide in healthy life expectancy is piling pressure on the state pension as well as private pensions, warns Hargreaves Lansdown.
Figures from the Office for National Statistics found that between 2011/13 and 2020/22, healthy life expectancy for both men and women fell in England and Wales. Healthy life expectancy at birth was 62.4 years for men and 62.7 for women in England and 61.1 years for men and 60.3 years for women in 2020/22.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Healthy life expectancy is on the slide, piling pressure on not only our own pension planning but the state pension too. With state pension age currently pegged at 66 and set to go higher in the coming years, there is a widening gap between how long we can reasonably expect to work and when we will collect our state pension.”
Morrissey said the figures “throw up all kinds of questions” for the future direction of state pension age, raising a question mark over the wisdom of further increases.
Morrissey continued: “The recent review into whether the step up to age 68 should be escalated concluded that the timetable should stay as it is for now but with a burgeoning older population pushing up the cost, we can’t rule out further changes in future. This demonstrates the need for an overarching review of the state pension to make sure it remains on a sustainable footing long-term and gives people certainty about what they will receive and when so they can plan.”
Personal pension planning will also need to take precedence, she said. “People need to be prepared to use their pensions to bridge the gap during a time where they can no longer work but cannot yet claim state pension.
“While the introduction of the Auto-Enrolment Extension Bill will help more people to build bigger pensions, Morrissey said more needs to be done to help people prepare for retirement, including increasing contributions and building up other savings such as ISAs to build a buffer.”
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