What is the impact of increasing longevity?
The fact that we're living longer, healthier lives means that the traditional view of retirement is fundamentally changing and our experience of it will be totally different from our parents or grandparents. It also means that the 'normal' ways of planning our retirement finances are no longer adequate.
How retirement is changing
Retirement is getting longer - retirement is no longer a short period of up to 15 years after your working life that can be funded by the state and a personal pension. In fact, your retirement could last as long as your working life, up to 30 years or more, and the way you finance it will need to reflect this.
Retirement is no longer about giving up work - rather than retire in the traditional sense, increasing numbers of people over 55 are starting anew, a phenomenon known as 'returnment'. Whether this means starting a new business or volunteering, retirees are staying actively involved in the workplace whether into their 60s, 70s or beyond.
Retirement is no longer a period of slowing down - retirees increasingly see retirement as a chance to do all the things they never got a chance to do earlier in life, due to time or money constraints. This could be travelling the world, becoming actively involved in the community, learning new skills or going back into education.
Retirees will be healthier than ever before - advances in medical science and a focus on wellness (preventing illness) via a healthy diet, regular exercise and proactive health monitoring mean that retirees can expect to be in far better health for longer than previous generations.
Retirees will embrace technology - today's retirees are embracing technology to make their lives easier and stay connected with family and friends. For many, online working, shopping, healthcare and communication with families is already second nature. Technology will help people feel connected with the world from the comfort of their own home - especially important for the ill or housebound.
Retirement will be increasingly funded by individuals - with a higher proportion of the population in retirement and drawing on state support, we expect that the level of state support will decrease and that costs of living and care will need to be met more and more by individuals rather than the government.
These fundamental changes to retirement mean that the way we finance this period in our lives will also need to change. Read more here.
Effect on retirement planning
Find out how increasing longevity is affecting retirement planning.