Planning for a Longer Life: Why Healthy Years Matter Too

Insights Worth Knowing

When people think about retirement planning, one question often sits at the centre of every decision: How long will my money need to last?

For many years, life expectancy has been a key consideration in financial planning. However, recent research suggests there may be an equally important question to ask:

How long can we expect to remain healthy?

The distinction matters because retirement planning is about much more than generating an income. It is about maintaining independence, preserving lifestyle choices and ensuring you have the financial flexibility to adapt as circumstances change. Research from the Office for National Statistics (ONS) highlights that while people are continuing to live longer, healthy life expectancy tells a very different story.

Looking Beyond the Average

Life expectancy figures are useful, but they should never be viewed in isolation.

According to the ONS, a man reaching age 65 can expect to live to around 85, while a woman of the same age could expect to live to around 88. However, these figures are averages and individual outcomes vary considerably. The ONS estimates that a 65-year-old man has a one-in-four chance of living to 92, while a woman has a one-in-four chance of reaching 95.

At the same time, the ONS has revised down its projections for future improvements in life expectancy, indicating that people are still expected to live longer over time, but perhaps not at the pace previously assumed.

For financial planning purposes, longevity remains a significant consideration. A retirement lasting 25 to 30 years is no longer unusual.

The Health Factor

What often receives less attention is healthy life expectancy.

The latest ONS research suggests that healthy life expectancy at birth is around 60.7 years for men and 60.9 years for women. Those figures have fallen compared with previous measurements.

This means there can be a significant gap between the number of years we live and the number of years we spend in good health.

For many individuals and families, this reality has important implications. Future health-related costs, lifestyle adjustments, home adaptations or care requirements can place unexpected pressure on retirement finances.

What This Means for Financial Planning

A robust retirement strategy should account for more than income generation.

It should also consider:

• The potential need for care later in life
• Flexibility to adapt spending as circumstances change
• Building reserves for unexpected costs
• Protecting wealth for future generations
• Maintaining financial independence for as long as possible

Financial plans that perform well are rarely built around average outcomes. They are designed to remain resilient across a range of scenarios.

Worth Knowing

Retirement planning is not simply about preparing for a long life. It is about preparing for a life that continues to evolve. The most effective plans balance income, flexibility and protection, helping you maintain confidence through every stage of later life.

Tax treatment varies according to individual circumstances and is subject to change.

The Financial Conduct Authority does not regulate tax advice.

We are not tax or legal specialists and therefore should you require advice in this area we recommend you speak with a suitably qualified Accountant or Solicitor.