Increasing life expectancy is one of the biggest challenges facing pension providers and financial advisers. It presents unique challenges to our assumptions, habits and everyday spending decisions.
A fascinating report called Living the Future Life by the Pension Policy Institute looks into the impact of living longer on four key areas; housing, work and skills, health and social care and family and social networks. As you might expect, technology has a large part to play in all areas with positive and negative outcomes.
It places the emphasis on the individual to adapt to changing circumstances, but the report takes aim at policy makers in areas like health and social care, where existing policies are at obvious risk from a rapidly ageing population.
We’ve summarised the key findings below and but if you’d like to get the full details, you can find out more here.
The research findings
The research is caveated by the fact that the 100-year life is not universal as there are persistent inequalities in life expectancy related to the wider determinants of health including income, housing and wider environment:
- There has been a slowing down in improvements in life expectancy both at birth and at age 65 for men and women
- There are persistent inequalities in life expectancy both within and between local authorities
- Lower life expectancy is associated with lower income and the wider determinants of health
Not withstanding those facts, the report considers the impact on the largest portion of the population who, fortunately for them, are not subject to lower life expectancy through a higher income and general good health.
Work and Skills
- Automation and the ongoing shift towards new technologies will result in many current blue and white collar job roles changing, expanding or becoming redundant.
- Fostering the ability to be creative at illustrating how pre-existing skills can be applied to new settings is one approach to being agile for future labour market trends.
- Individuals with age-related disabilities can have more productive work through the use of the latest assistive technologies including bionics and service robots. These technologies can also contribute to the prevention of illness and disease in the workplace.
- Taking up self-employment and business ownership in later life can be a flexible and autonomous way to extend working lives
Health and Social Care
- The opportunities associated with longevity will be most accessible to those that embrace the prevention of illness and disease and are at their optimum physical and mental health. Tackling the persistent inequalities in life expectancy related to income, housing, and the wider environment would open up these opportunities to more socio-economic groups.
- A combination of a decrease in NHS funding, reduction in social care services and challenges to providing care for relatives will render the traditional assumptions around health and social care outdated.
- Options for health and social care providers include a move away from the assumption that there is family support to fill gaps in provision of care and a move towards flexibility, choice, and personalisation.
- A collaborative multi-stakeholder approach could foster financial capability and improve access to good quality, clear information and signposting to relevant financial advice and guidance around the costs of health and social care.
Family and Social Networks
- People will be required to work on their resilience and be flexible and creative about generating and maintaining personal and professional connections in the context of disruption to the operation of community and support networks.
- Digital inclusion will become increasingly relevant as technological advances lead to new ways to connect with friends and families as well as participate in hobbies.
- Four generations within a family living at the same time will change family structures moving forward and be a catalyst for changing generational attitudes.
- The growing population of people ageing without children have a desire to connect with others in this group to share advice on the specific financial, employment, legal and care-related issues affecting people like them.
- Property developers and construction companies are increasingly incorporating knowledge on the way people use their homes and local areas to connect with families, friends and the wider community to inform the designing of homes and development of areas.
- Issues around fuel poverty and affordability underpin the sustainable homes agenda.
- There are a number of ways people can draw on housing to fund retirement. Beyond traditional ways (equity release and downsizing), retired households are increasingly turning to taking in a lodger to make income from their homes.
- An integration of health and social care with housing policy could be a catalyst for encouraging the development of homes that are adaptable to changing health status and allow for care and treatment in the community.
Coping and planning
Futurologist Graeme Codrington, a futurologist and CEO of consultancy Tomorrow Today Global, who wrote the foreword to the report, picked out three immediate changes for all of us to consider as we try to understand what living significantly longer means at an individual level.
A mind set shift is required. Our picture of a life of roughly four quarters (20 years of study, 20 years of establishing career and family, 20 years of working and 20 years of retirement) is inadequate for this new reality. We can’t simply stretch out these previous categories to span a century. We need a new framework of what a good life actually looks like over an extended period. We will have to build this picture as we live it, but we need to shift how we think about life stages. This is not something we can only do as individuals, but also something we must do together as a society, because it affects us all.
A simple example is whether we offer OAP discounts to fit, healthy and still-working 65 year olds, or whether that age threshold needs to move upwards along with retirement ages. Absolutely key to this mind set shift is our need for more flexibility in our planning, and being open to our final decades looking a lot different than we had planned.
We must think and act more proactively in relation to our health and our life choices around mental and physical abilities, workplace skills and overall wellness.
Financial planning will have to adjust to a 100-year life, with more thought around how long we work and what careers look like, what retirement is and needs to be, budgeting, saving and developing resilience and agility in relation to all these issues.
These are not easy issues to deal with, and some people might even fear them.
There is no need to. The promise of longevity is that we will be younger longer, rather than older longer, and if we plan correctly and find the right support we can live longer, happier, healthier and more fulfilled lives. But this won’t happen by accident—it needs to be designed. This report provides you with an invaluable starting point for that design, and paints a picture of a bright, extended future for many of us.