Retirement

Specialist retirement solutions provider Partnership looks at the impact for the UK’s baby boomers on the community and themselves.

Baby Boomers – key highlights of the immediate post-war generation:

• 65 year olds can expect to live another 23 years - until their late 80s - as they are living healthier, longer lives. In 1946 and the first half of 1947, 65 year olds could expect to live for only 13 years. 
• The number of 65 year olds in Britain will increase by around 150,000 between 2011 and 2012 – those born in the latter half of 1946 and the first half of 1947, corresponding with the post-war spike in births. 
• In 2011 658,000 people will turn 65. Next year it will increase to 806,000. This is nearly 100,000 more than the total number of babies born each year in England and Wales.

Many will join a golden generation

• People aged over 65 collectively own property worth £765.18 bn on which they do not have a mortgage

But, it's not all good news

• Baby boomers will add an extra £2 billion to the bill for basic state pension (which in 2010 amounted to £56 billion).
• There are more people aged over 60 than under 16.
• In the oldest 10 councils in the UK for every 2 people of working age there will be 1 person in retirement.
• Many will face poverty in retirement as the average man and woman retiring in the UK today can look forward to a state pension of under £6,000 per year, plus a private pension of around £2,000 a year.

Partnership Chief Executive, Steve Groves, said: “We wish the baby boomers a happy 65th birthday on 8 February 2011.

“They form part of a golden generation, many of whom have been fortunate enough to reap benefits that younger generations will not.

“Many have enjoyed record house price inflation, company pension schemes and free education for themselves and their families.

“They can now look forward to living for nearly twice as long in retirement as the 65 year olds who were celebrating VE Day,” said Groves.

However, he added that this longevity will present many challenges for younger generations.

“With more people aged over 60 than there are under 16, there will be fewer young people to meet the costs of the elderly through direct taxation. In the oldest councils in the UK there will already be 2 people of working age for every 1 in retirement. By 2030 this will increase to 4 people working for every 3 retired in the oldest councils,” he said.

The Government is working hard to find solutions for this significant shift in demographics by introducing legislation to end the default age for retirement and extending the pensionable age for men and women.

But despite the wealth of those who will turn 65 in 2011, many will face many years in poverty. Research conducted for PICA (by think tank Oxford Economics and the ONS) reveals that 23% of pensioners – or 2.5 million people – now officially live out an impoverished retirement.

The good news is that many pensioners, who are cash poor but asset rich can draw upon nearly £1 trillion pounds of un-mortgaged property that they own, through equity release or down-sizing.

Many others can improve their retirement income significantly by shopping around for the best annuity rate at retirement.

“It is a scandal that currently only one in three people do so, despite the fact that many can increase their retirement income by 20% or more if they are among the 40% of people who are eligible for enhancements because of health and lifestyle conditions,” said Steve Groves.

“The scale of the problem is significant and cannot be swept aside. In the last decade Partnership has estimated that UK pensioners have lost up to £7bn in retirement income by not shopping around. This is the same amount as the UK spent last year on the Irish Bailout.

“People who are entering retirement now should also be writing wills and planning to meet the costs of their long term care. It is estimated that between 1 in 2 males and 1 in 3 females aged 65 today will need care during their lifetime,” added Groves.

About Partnership:

Partnership is a specialist provider of financial solutions for people with health/ lifestyle conditions, as well as those suffering from a serious medical impairment. Partnership was the first company in the UK to offer higher retirement incomes by taking account of people’s health and lifestyle conditions. It has been a consistent innovator developing this sector by championing the needs of those with even modestly reduced life expectancies.

Partnership has led the way in providing products designed specifically for individuals whose health and lifestyle is likely to result in a reduced life expectancy. Partnership is expert in the field of medical underwriting and has a unique in-house data set. Partnership believes that its years of accumulated data and knowledge gives it a unique understanding of the impact of health and lifestyle choices on longevity. This, in turn, enables it to offer the most accurate assessment of a client’s life expectancy and therefore offer the fairest price to them.

Partnership has a comprehensive offering in the retirement sector and offers a complete range of Enhanced Annuity solutions, from clients who smoke or have minor health impairments, through to serious conditions such as cancer. Partnership is the largest provider of annuities for Long Term Care funding in the UK, with 80% of the market, and also offers specialist Protection solutions for clients who have been declined cover from standard providers. Partnership offers a firm commitment to supporting advisers in growing their business.

Partnership was this year’s winner of the 'Long-term Care Provider' award at Health Insurance Awards and won this year’s Simply Biz ‘Annuity Provider of the Year’ award. It has been awarded a 5 Star rating at the prestigious Financial Adviser Service Awards, was judged “Best Enhanced Annuity Provider” at the Moneyfacts Awards and achieved an ‘eee-rating’ (the highest possible) for its web-based enhanced annuity platform in the e-Excellence Awards.

www.partnership.co.uk