'100 not out'

Sunday Times 4th May 2008 by William Kay

Life Trust Insurance, a new company backed by Royal Bank of Scotland, has stumbled on a strange paradox. While many of us have seen our parents surviving longer, and we confidently expect our children to live longer still, we don't think this trend will apply to us.

Andy Briscoe, Life Trust's Chief Executive, said: "People acknowledge increased longevity for younger generations, but do not realise that this is a very real issue for them today."

Bizarrely, one in ten Brits do not expect to live as long as their parents. The truth is, though, that among today's 40-year-olds, the men have a one in three chance of reaching 90, and half of the women will do so.

Indeed, a tenth of 40-year-old women and one in 25 men will celebrate their centenary. Those numbers shoot up for younger people.

So it is becoming increasingly sensible to plan your long-term finances on the assumption you will live to 100. Harder to estimate are how long you will be able to work - and therefore add to your income - and how many of the next generation will push on to 110 or 120.

But one way or another, we are going to have to get used to saving far more than we do, to spread our spending over a much longer period.