Living to 125 years could be 'the norm'
For babies born this year and next, living as long as 125 years will become "the norm", according to an influential speech by Otto Thoresen, the director general of the Association of British Insurers (ABI).
He warned that higher life expectancy will put huge strains on the pension industry in future years, with millions of people facing poverty in retirement as a result.
Britain's oldest man, Reg Dean, is already 110. "We are living longer, of which I know you are all very aware," Thoresen told an actuarial conference this week.
"I know of several insurers, and you may be among them, who are now modelling pensions and retirement savings products on the assumption that customers could live to be 120 or 125 – and with very different patterns of retirement."
The most commonly used measure of life expectancy is period life expectancy at birth. This is the average number of years people would live if mortality rates at the time of their birth remain constant throughout their lifetime.
The latest projections for the UK suggest boys born in 2011 can expect to live 90.3 years on average, while girls are likely to reach 93.8 years.
This does not take into account further medical advances made during their lifetimes, though. And it is these that make ageing the greatest threat to the UK's economic future.
The fear is that the elderly of the future will face financial hardship that today's pensioners only see in their worst nightmares.
"With men and women living on average 30 years longer than they did 100 years ago, by 2100, people living to over 100 years old will be the norm," Thoresen said.
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"How will we ensure that mankind's greatest achievement of prolonging life in this way doesn't lead to poverty for millions of people, and health and social care systems which cannot cope with the increased demands being made of them?
"The UK state will not be able to afford to provide pensions and health services and care services to its ageing population at the level people will need."
Anyone planning to fund their own retirement, meanwhile, would need a retirement income of well over £1 million to retire at 65 and have £15,000 a year until the age of 125.
Thoreson is not the only one worrying about how cash-strapped Britons will survive as they get older, however.
Despite more than a third of workers today not contributing to any kind of savings plan, a massive 41% of of over 55 now expect to continue working in retirement and some 20% do not expect to retire at all, figures from workplace pension provider NOW show.
To encourage them to save more, 50% of those asked said they would need reassurance of stable returns, and more than four in 10 said they would need a guarantee their pension provider was trustworthy.