LIFE EXPECTANCY DATA: HOW LONG WILL YOU LIVE?

Life expectancy data is extremely important when planning your future. Essentially, the longer your lifetime then the more money you will need to fund your future expenses, especially if you plan to stop work or retire on a fixed income. This article examines the concept of life expectancy and why you need to think carefully about this before making long term financial decisions.

Key points

  • Why is life expectancy important?
  • Visualise the time you have left
  • Historical UK life expectancy data
  • How to predict your life expectancy
  • UK average life expectancy data based on age and sex
  • Health impacts on life expectancy data
  • Where you live has an impact
  • Life expectancy and the effect on Financial Planning

Why is life expectancy important?

In my experience, most people can easily think about the past, but they exist in the present. What they neglect to think about carefully is the future. Life expectancy is important because you only get one life, and ultimately that will end for all of us.

We are all headed in the same direction

It won’t come as news to you that we all die, and so we are all heading to the same ultimate destination. You need to prepare for the time you have remaining; this article should remind you that you might have more life expectancy than you think.

Make the most of the time you have left

My philosophy is that you should make the most of the time you have left, while you are still fit and able to do so. It is all too easy to ignore the future and worry about these issues later.

Life expectancy is lengthening

You may live a much longer life than you imagine. You cannot simply take a look at the lifespan of your parents or grandparents. We are all different, and medical advances are gradually increasing life expectancy. The advances in DNA mapping and data capacity should lead to a golden age for medical progress as scientists and doctors trace the route causes of all illnesses. I expect this to lengthen everyone’s life expectancy, potentially at a much greater rate.

Prepare realistically for your future

Financial Planning can help you to think about what resources you need to put aside to provide you with security for your future and a lifestyle worth living. Remember that longer life could mean coping with serious illness for a longer period.

Visualise the time you have left – life expectancy using a timeline

Take a look at this timeline, which illustrates the point about Financial Planning and life expectancy.

How long will you life? Your life expectancy and longevity as a timeline

How long will you live? Your life expectancy and longevity as a timeline

If you expect to live a long life then you need to work harder now to provide the resources to fund for a secure and worthwhile future. Of course, if you expect to live a shorter lifetime then your planning can assume you need lower capital.

You should not fall into the trap of thinking you will die at a relatively young age. I recall an incident I witnessed on the London Underground some years ago. A young man was listening to his punk music on his Walkman (yes, I know I am showing my age). The music was so loud in his headphones that the whole carriage could hear it, even over the noise of the train. An elderly passenger asked the punk to turn down the volume, reminding him that at that level he would be deaf by the time he was 50. The youth aggressively told him that he didn’t want to live to 50 anyway. The elderly gentleman neatly replied that he would when he reached 49!

We can apply this to Financial Planning and life expectancy. You may think that you do not want to live to an advanced age, but that reality is more likely than you might think. And when you get there, the likelihood is that you may wish that you had prepared for a long lifespan.

Historical UK life expectancy data

life expectancy data historical

Historical life expectancy data shows a rapid improvement since 1850.

Source: Max Roser (2016) – ‘Life Expectancy’

If you were born in an earlier age, your life would have been much shorter than today. The data above clearly shows that the average life expectancy in the UK was pretty low throughout the past 500 years. This was due to disease, famine, nutrition, medicine and war. Clearly, some people lived longer lives, but many died much younger. You can see a huge increase in UK life expectancy from the 19th Century as medical advances reduced disease.

How to predict your life expectancy

The easiest way to predict life expectancy is to use the statistical evidence. This can show you how long you will live based on the average. Of course, no-one is average, and your own life expectancy will be determined by a variety of factors – genes, work history, exercise, food etc.

The statistics can lead to a certain complacency, or negativity, about your life expectancy. For example, if the average life expectancy for someone at birth in the UK is now 86, you might use this figure in your Financial Planning. The reality is that this is the average figure. Half of the population will live longer than age 86.

UK average life expectancy data

Here is a summary of life expectancy data from the Office For National Statistics.

How long will you live - life expectancy and longevity ONS data

How to read this data

This table shows results based on age now for men and women. If you examine the top row you will see that a child born today should expect to live an average lifespan of 91 for a boy, or 93 for a girl. That is the average, meaning half the children born today should expect to live longer.

The next 2 columns show that the same child has a 1 in 4 chance of living to 101 (boy)or 103 (girl). They have a 1 in 10 chance of living to 107 (boy) or 108 (girl). A newborn baby today has a 28% chance of living to 100 if it is a boy, or a 35% chance if it is a girl.

You can select the entry closest to your age on the left.

You can get your own results using the Office For National Statistics life expectancy calculator.

Bear in mind that this data is for the whole population. It does not take into account other factors such as income, wealth, health and occupation.

The effect of health on life expectancy

An alternative approach has been taken by Just Retirement, a leading provider of pension annuities. They have taken data from the UK pensions industry and applied knowledge of how health issues impact on life expectancy. This still uses average data from a pool, but rather than looking at the population as a whole it examines people who have bought a pension income product. By extension, this would put them into a higher income bracket than the general population.

Here is a summary of the data:

How long will you live - life expectancy and longevity JR data

How to read this data

This table shows results based on age now and health for men and women.

  • Good health means you are a healthy weight, do not smoke and are not on medication
  • Average health means you might be slightly overweight, or take medication for blood pressure or high cholesterol
  • Poor health means you have suffered from a serious condition such as heart problems, cancer or diabetes

If you examine the top row you will see that a 50-year-old in good health should expect to live an average lifespan of 93 for men, and 96 for women. Three quarters of men in this category should live to 85, and for women the age is 88. One quarter of men should expect to reach 99, and for women the age is 101.

You can select the entry closest to your age and health on the left.

You can get your own results using the Just Retirement longevity calculator.

Where you live makes a difference to life expectancy

Within the UK, life expectancy varies relatively widely according to where you were born and where you live.

England v Wales – life expectancy at birth

Life expectancy - ONS England v Wales at birth

Source: Office for National Statistics

This chart shows that a child born in England is likely to live longer on average than in Wales, even though the trend is rising in both countries.

England v Wales – life expectancy at age 65

Life expectancy - ONS England v Wales at age 65

Source: Office for National Statistics

This chart shows someone aged 65 living in England is likely to live longer on average than in Wales, even though the trend is rising in both countries.

In general, the ONS data seems to suggest that there is a North/South divide within England, with those living in the South experiencing greater life expectancy than the North.

Worldwide data

We should recognise that we are lucky to live in a developed nation. This data from the World Bank shows the disparity in life expectancy worldwide.

Life expectancy and the effect on Financial Planning

Clearly, your life expectancy will have a major impact on your future security and lifestyle expectations. Perhaps you can see now why we prepare our financial plans to age 100. After all, we would not want you to run out of money too early.

The likelihood that you will live longer than expected may also mean it is more likely that you may need care in the future. After all, the longer you live, the more likely that you will live with a serious illness at some point. Your Financial Planning needs to take into account the possible costs of future care.

If you would like to discuss your finances in relation to your life expectancy, please contact us.

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Dan Woodruff

Certified Financial Planner & Chartered Wealth Manager at Woodruff Financial Planning
Financial Planning helps you to navigate and anticipate significant life changes. I want to help you to ensure your money is managed wisely to give you the financial security that will fund the future and lifestyle that is important to you.

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