The growing gap between healthy life expectancy and life expectancy highlights the need for increased later life finance options, according to Key Later Life Finance.
Analysis of data from the International Longevity Centre (ILC) revealed the gap between healthy life expectancy and life expectancy has extended to 11.7 years, potentially increasing costs for people in later life.
Most recent data showed average life expectancy has increased to 82.2 years from 81.7 year while healthy life expectancy has only grown to 70.5 years from 70.1 years.
As people live longer with health conditions many may need extra support which will need to be privately funded.
However, at the same time ILC figures showed average employment spans have dropped over that period to 31.1 years from 31.6 years limiting people’s ability to save for their retirement.
Key Later Life’s own data revealed that more than 10 million over-65s own their properties outright without a mortgage and have up to £2.944tn in property equity.
Key said this substantial property wealth could be put to use supporting older people with boosting their retirement lifestyle and providing a safety net when they face unexpected financial shocks such as those caused by ill-health.
Government data showed average pensioner incomes in retirement is currently £20,120, rising to £29,170 for couples.
Care delivered in the home can cost around £25 an hour.
In contrast, moving into a residential care home can cost as much as £1,400 a week.
Will Hale, CEO Key Advice, said: “People in later life can have complex and expensive financial needs and the impact of ill-health can make a major difference.
“It is very welcome that people are living longer but healthy life expectancy needs to be considered as part of financial planning. Later life lending options are available but more people need to be aware of them and it is the responsibility of all advisers to take property wealth into consideration.”
He added: “Lifetime mortgages enable money to be drawn down tax free which can be a sensible way for over-65s to fund retirement needs.
“However, everyone’s circumstances are different and it is important that these products, which do have some downside risks, are accompanied by specialist advice. ”
