- Average life expectancy in the most deprived areas in England was 73.2 years for men and 78.3 years for women in the 2022 to 2024 period – compared with 83.6 years and 86.4 years respectively in the least deprived areas (Source: Healthy life expectancy by national area deprivation, England and Wales – Office for National Statistics)
- Life expectancy has risen since the previous non-overlapping 2019 to 2021 period, but in the most deprived areas it’s still lower than before the pandemic
- However, healthy life expectancy has dropped across the board, and is now 49.8 years for men and 48.2 years for women in the most deprived areas and 69.2 years and 68.5 years in the least deprived areas
- In the most deprived areas, men will spend an average of just 68% of their life in good health, while for women it’s 62% and in the least deprived areas, that rises to 83% and 79%, respectively
- Falls in healthy life expectancy highlight importance of long-term financial planning to ensure adequate funds in later life, particularly with the state pension age rising to 67 over the next two years
Sarah Coles, head of personal finance at AJ Bell, comments:
“We can’t take a long, healthy life for granted. People are living longer on average, but spending more of their lives in poor health. It’s worth checking your finances are up to the challenge this poses.
“Life expectancy is rising again – albeit slowly – but the length of time we spend in good health is actually falling, with the proportion of our lives we’re healthy for also dropping in turn, according to the latest ONS figures. This has serious implications for our finances, particularly at a time when the state pension age is rising.
“Those in wealthier areas are living longer, but they’re spending more of their life in poor health. It means it’s more important than ever to consider this period of your life and make sure you have made any preparations possible. It could mean downsizing earlier in retirement, to manage declining health and free up cash if you need care further down the line. It might mean building a bigger emergency savings safety net to cover any additional costs. It could mean increasing pension contributions and ringfencing more of it for later life. This is a huge challenge given the costs involved, so it’s worth talking to your family about your wishes too.
“On average people in more deprived areas face poorer health for decades. Women will spend an average of 30.1 years in poorer health – from the age of 48.2, while for men it’s 23.4 years, from the age of 49.8. It means there’s also the risk they get sick and are unable to work before their state pension kicks in. There are already plans in place to increase the state pension age to 67 by 2028 and 68 by 2046, but there’s every chance the path to 68 will be accelerated at some stage. At the moment, the average person aged 68 in well-heeled areas is in good health, but the average person in less well-off areas has been unwell for almost two decades.
“It means we all need to consider what would happen if we couldn’t work to state pension age – especially if we aren’t well enough to work to the age we can draw on any personal pension (55, rising to 57 in 2028). It may mean building safety nets elsewhere through emergency savings, critical illness cover or income protection, to cover you at least until you are able to take money from your pension.
“Unfortunately, for those who are most likely to need the extra support, in the least well-off areas, finding the money to build a safety net is more difficult. However, it’s important to consider whether there’s anything at all you can do. If money is too tight now, it’s worth revisiting this any time your circumstances change, and do whatever you can, as soon as you can afford to do so.
“The fact we’re living longer on average means it’s also important to take stock of whether you risk outliving your pension. If you plan to buy an annuity it will last for life, but if you plan to go into drawdown, it’s worth using a calculator to see how long that money is likely to last. One sustainable option is just to take the natural yield from pension investments, so the capital remains intact. This income will vary, so it makes sense to have savings and investments outside your pension you can draw on if needs be. It’s worth doing these calculations as soon as possible, to see whether you’re currently on track with your pension investments, or whether you need to consider tweaking your contributions.”