Andrew Tully, technical director, Canada Life commented: 'Our research shows people typically underestimate their life expectancy by around six years for women, and five years for men. On the one hand this is positive as people are living longer than they think, but it can also have a significant impact on financial plans.
'When we talk about averages though it is important to remember averages are just that, and can mask significant differences in life expectancy across the UK. People's retirement financial plans need to be flexible enough to cope with the unexpected while also providing a level of financial security and a combination of drawdown and annuity can deliver just that.
'It is key to seek proper financial advice when planning for the future. An adviser will help design a plan which takes into account all the risks in retirement, be that investment risk, drawing down too much or too quickly, or even facing the possibility of outliving your savings.’
When asked what age they expect to live to, the Canada Life research1 shows the average answer from over 50s was 82 years old. Men estimated a lower life expectancy than women (81.2 years compared to 83 years).
ONS data shows that 50 year olds are currently expected to live on average until 86 if they are a man, and 89 if they are a woman. One in four men age 50 can expect to live till age 95, while women of the same age can expect to live till age 97. Men are typically underestimating their life expectancy by almost five years, and women by six years.
Canada Life's research also reveals stark differences in predicted life expectancy depending on where over 50s live. Londoners expected to live the longest with an average of 83.6 years old, while the lowest, in Wales, was four years less at an average of 79.5.
Free tools are available which use official ONS data to guide people when considering life expectancies
IFS paper on the Annuity Puzzle
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