Research from Just Group has shown that people born between the mid 1960s and early 1980s are underestimating their life expectancy by around ten years.

As a result, so-called ‘Generation X’ is approaching retirement without an accurate idea of how long their savings will last after they retire.

The findings show that women who are now between 40 and 54 will live, on average, to around 90.5 while men will live to 87.5. This could have serious consequences when it comes to pension planning and making decisions on what is needed to create a pension fund that will last.

Commenting on the results, Just Group communications director Stephen Lowe said: “The combination of easy access to pension cash and underestimating life expectancy could have some toxic consequences”.

Worryingly, the report also found that Generation X is almost certainly going to have to work longer than ever before. But, with a changing economy, that depends on suitable jobs being available.

Should you take cash out of a pension?

Over the next decade or so, almost a million members of Generation X are set to hit 55 every year. Many of these people will face the decision over whether to keep growing their pension or to access funds immediately – before state retirement age.

But, while it could be tempting to withdraw cash, experts are now warning that this could be a decision they will regret as they get older.

As such, having a more realistic idea about current life-expectancy rates is crucial if people are going to make an informed decision.

Leaving a fund to grow

According to Just Group, each pound taken out of a pension now could result in two pounds less a few years later when money is tighter. At the same time, it suggests that modest pensions could grow to a decent size if supplemented by extra contributions and a bit more time.

Good news for Generation X

While the report offered some stark warnings, it was not all doom and gloom. In fact, rising property prices could result in many homeowners being left with equity that can be extracted to supplement pension funds – either through downsizing or equity release.

However, as everyone has a different set of circumstances – both in terms of finances and health – people should seek informed and impartial advice to ensure the decisions they make now are the best ones to help ensure they’re comfortable later in retirement.


Speak to one of our expert team by calling 01634 353 658 or email