Retirement round-up

 

The (not so) silly season

The summer months are often referred to as ‘the silly season’, when hard news is replaced by an array of frivolous headlines in the media. Not so in summer 2015. A migrant crisis struck Europe; it was the coolest and wettest summer in years; and volatility rocked the world’s stock markets.

24 August has been referred to as Black Monday as China’s stock exchange fell 8.5% in one day. This resulted in sharp drops in markets in the US and Europe. 

Investors recognise that share prices can go down as well as up and you might not get back as much as your originally invested, but at times like these it’s good practice to review your investments to ensure your holdings are still in line with your objectives. This act is referred to as ‘rebalancing’. You can read about how to put this into action in our editor’s article Performing the great rebalancing act.

Pension freedoms off to a flying start

Aviva research has found that 90% of savers aged 55 and over are aware of the new pension freedoms which were introduced in April. These freedoms give many people much greater flexibility in how they access their pension money.

Such a high awareness figure probably won’t come as a surprise to readers of Thinking Ahead – we’ve paid plenty of attention to the freedoms and what they might mean to our readers. But it’s certainly interesting to note that awareness seems to have been matched by activity in the months since April.

According to the Association of British Insurers £2.5 billion worth of payments were made to eligible savers in April, May and June 2015. That’s an equivalent of £27 million each day.
Aviva’s short video  outlines the new pension freedoms and some of the things you should consider before acting. Take a look – it’s only a couple of minutes long. 

OMG. HMT MP bans TLA

Many would argue there’s room to simplify much of the language associated with managing your finances. Aviva wouldn’t disagree. Nor, it seems, would Member of Parliament (MP) and City Minister in Her Majesty’s Treasury (HMT), Harriet Baldwin. According to reports she has banned her civil servants from using acronyms – three letter acronyms (TLA) and others. The ambition is worthy. The challenge for her civil servants however should not be underestimated – ISA, SIPP, DWP, FCA, PRA, HMRC, APR, CPI, RPI, GDP, FX, IMF, VAT, UFPLS, LIBOR, FTSE, NYSE, QROPS…

LOL.

Baby boomer myths busted

The baby boomer generation – loosely those aged between 55 and 70 – has been referred to as “the richest and most powerful generation that ever lived ”. There have been suggestions that the riches experienced by the baby boomers have been enjoyed at the expense of younger generations. In response to these allegations, a group of charities called the Ready for Ageing Alliance have published a series of statistics. Their brave attempt to bust some myths  includes some revelations that probably wouldn’t surprise the baby boomers themselves:

They’re talking about which generation...?

- The claim: Baby boomers enjoyed free university education
- The response: Less than 20% of those aged 55-64 have a degree

The claim: Baby boomers can look forward to security in retirement thanks to generous pensions
The response: Nearly 2 million people aged 55-64 do not have any private pension savings

The claim: Baby boomers who have retired spend their life taking cruises and playing golf
The response: People in their 50s and 60s are less likely to go on a cruise than the average age, and people aged 50 and over play less golf than people in their 30s and 40s.

The claim: Baby boomers are so well off they can afford to retire early
- The response: More thank seven out of ten people in their 50s and early 60s are in work

As is so often the case, maybe stereotypes give an unfair representation. At Aviva, we are keen to support savers whether they are saving for the future, approaching retirement or in retirement.

Are you old enough to be a World Master?

Athletics’ World Masters Championships date back to 1975 and bring together veteran sportsmen and women to compete across a range of disciplines. Competitors must be aged 35 or more, and are grouped into five-year age brackets in all events. The 2015 championships took place in France and its oldest competitor was 98-year-old Frederico Fischer from Brazil.

Frederico was racing in the 100 metres sprint , an event in which he proudly claimed silver with a time of 24.89 seconds. As you might expect, the Brazilian veteran was pipped at the post by a younger man, in the form of Charles Eugster of Great Britain. Recording a time of 23.50  seconds, Charles is a sprightly 96.

You can see Frederico and Charles competing for yourself.

Life expectancy near doubles since records began

The Office of National Statistics (ONS) has published their latest life expectancy figures . They show a continuing trend of increase across the country. Their analysis dates back to 1841 when life expectancy at birth for men was 40 and for women was 42. The latest figures for England and Wales show life expectancy for men has now nearly doubled to 79 for men and 83 for women. The fastest period of growth was in the first half of the 20th century, primarily because of the reduction in infant mortality.

In comparison to a shortlist of eight developed countries, male life expectancy in England and Wales, at 79 years, could be described as ‘mid-table’. Topping the table for men is Iceland at 80, with the USA at the bottom on 76.

Women in England and Wales live longer than men, but their relative international life expectancy is in the bottom half, at 83. Topping the table for women is Japan at 86. Bottom of the table is (once again) the USA, at 81.

You can use Aviva’s online calculator  to estimate your own life expectancy . It won’t offer you any guarantees, of course, but it could help you start thinking about how long your retirement may last – and how much you might need to put aside for it.


AR01490 09/2015

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