People aged 50 and over on average believe they will live until around 80 despite official figures suggesting they will live for several years longer.
The gap between expectation and reality suggests that a new retirement gap opening up, according to one pension provider.
Canada Life asked pre-retirees how long they thought they would live. Male and female respondents both said they expected to live until age 80.
But according to the ONS life expectancy calculator, a male aged 50 will, on average, live to 84, while a women aged 50 will live on average to 87.
The gap in expectation and reality creates additional pressures on retirement planning and a different type of retirement gap, according to Canada Life, especially given the choices the majority of people currently make around their plans, choosing unsecure retirement income over any type of guarantee.
Nick Flynn, retirement income director at Canada Life, said: “Longevity risk is the one known unknown in retirement planning, but if people are underestimating their life expectancy, this opens up a new retirement gap.”
He said one in four women aged 50 today can expect to enjoy retirement into their 90s, typically living until 95.
He warned that people not having conversations about their own mortality will leave them open to falling short when it comes to their retirement income.
He said with the significant improvement in annuity rates witnessed over the past 18-months, annuities deserve more than a secondary glance.
The research was conducted among 2,000 UK adults, of which a representative sample of 955 were aged 50 and over. Fieldwork was conducted by Opinium between 28 April and 2 May.
ONS life expectancy calculator: https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/lifeexpectancycalculator/2019-06-07
