Greg McClymont, the Pensions Minister in the coalition government, has produced an interesting report on an academic study of longevity. It was Mr McClymont who, when asked in an interview what if anything kept him awake at night, replied “Andy Murray’s second serve”.
The conclusion reached by the academics is that longevity is being significantly underestimated and that many people will need to review their financial provision for retirement.
History suggests that life expectancy has risen in a straight line since the year 1800, and current estimates of an average life span in developed countries range between the ages of 80 and 85. However, the academics concluded that a child born today is likely to live to the age of 100.
The assumption that lives will follow the sequence of education, work and retirement is being called into question, and a more fluid progression is envisaged, partly as a result of individuals demanding greater flexibility in the way they work. People no longer expect to have a job for life, but instead to change jobs several times.
Meanwhile, the increased use of technology is not only relieving workers of more mundane tasks, but is also assisting them to work for themselves. The legal profession is seeing a marked growth in the number of ‘virtual’ law firms, consisting of self-employed lawyers working under an administrative umbrella, at times to suit themselves. This is proving particularly attractive to women lawyers wishing to combine work and parental responsibilities.
Equally technology is equipping individuals to keep on working beyond traditional perceptions of retirement age. The stoic politician Gordon Brown once adapted the quotation “I have seen the future and it works” to say “I have seen the future and it is work”.
With ever-increasing longevity, financial planning will rightly come to be seen as more important than financial advice in maintaining savers’ standards of living.
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