15 Oct 2019
Aviva says that stepping away from work in your 60s and retiring into a life of leisure is a relatively recent idea.
Just over a century ago, people in the UK died on average 23 years before the official retirement age.
The insurer says the odds of living to 100 are around 50/50 for a 20-year-old in a Western developed economy.
Aviva says that this increasing longevity is disrupting the three-stage lifecycle of education, work and retirement.
Built on a life expectancy of around 70, it is unsurprisingly not coping with life expectancies far higher.
The insurer says that, with low interest rates, many will struggle to save enough by their mid-60s to support themselves for a long time. Retiring in your 60s or earlier might - once again - become the exception rather than the norm.
Charlie Jewkes, head of global financial institutions at Aviva Investors, said: "Right across the globe, the idea that the state should guarantee retirement provision is becoming outdated.
"This is a huge issue, because it will mean that everyone will need to take greater financial responsibility."
Meanwhile, analysis from Aegon shows those wanting to retain their lifestyle into retirement shouldn't be lulled into a false sense of security just because they're in a workplace pension.
While some in such pensions will be paying substantial sums, often matched by their employers, others who are paying at the auto-enrolment minimum may find themselves far short of being on track for a comfortable retirement.
Steven Cameron, pensions director at Aegon said: "Maintaining your lifestyle throughout your retirement years is something many people aspire to. But, for most individuals, this will not be the reality if they are simply being auto-enrolled into their workplace pension.
"Someone earning £27,000 should be aiming for an annual income in retirement of around £18,000 in today's money to maintain their lifestyle.
"While the State pension will on current terms provide around £8,767 of this, and being auto-enrolled will also produce a valuable fund, they still face a major shortfall - and the longer people wait to address this, the harder it is to catch up.
"Someone who is auto-enrolled into a workplace pension from age 22 might still face a gap of £106,500 in today's money. To plug that, they might need to pay in an extra 4% of earnings on top of the 5% they are currently required to pay under auto-enrolment. But someone without any prior pensions auto-enrolled at age 35 would need to pay an extra 13%.
"While these extra amounts may seem daunting, some employers will 'match' any additional employee contributions with an equivalent employer contribution. In addition, the Government grants tax relief on employee contributions, This can mean it can cost as little as 1.6% from take-home pay to have 4% paid into your pension.
"The best chance of getting close to maintaining your lifestyle in retirement is to start paying more than the automatic minimum from as early as possible. It can pay to seek advice to ensure you are on track for the retirement you aspire to."
Aberdein Considine have a team of independent financial advisers who can help you devise the correct investment and saving strategy to allow you to enjoy the lifestyle you want when you retire.
To speak to one of our advisers, click here or call us on: 0333 00 66 333