The widening gap between healthy life expectancy and life expectancy highlights a need for more later life finance options, an equity release adviser firm has said.
Key Later Life Finance analysed data from the International Longevity Centre (ILC), which showed that the gap between healthy life expectancy and life expectancy had extended to 11.7 years. The firm argued this could increase costs for people later in life.
Other data showed that the average life expectancy has increased from 81.7 years to 82.2 years, while healthy life expectancy has only risen from 70.1 years to 70.5 years. Key said people who lived longer and with health conditions could need extra support that would require private funding.
However, figures from the ILC also showed that average employment spans had shortened from 31.6 years to 31.1 years.
This suggests people may have less time to save for retirement.
Further, figures from Key showed that more than 10 million people over the age of 65 owned their property outright and had up to £2.95trn in property equity.
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The firm said this property wealth could be used to support living costs in retirement and cover unexpected expenses.
In addition, data from the government showed that the average pensioner income in retirement was currently £20,120 or £29,170 for couples. With at-home care costs at around £25 per hour, Key said, while this was expensive, it would enable older people to maintain a quality of life and independence. It would also be cheaper than moving into a residential care home, where costs can be as high as £1,400 per week.
Will Hale, CEO of Key Advice, said: “People in later life can have complex and expensive financial needs and the impact of ill health can make a major difference.
“It is very welcome that people are living longer, but healthy life expectancy needs to be considered as part of financial planning. Later life lending options are available, but more people need to be aware of them, and it is the responsibility of all advisers to take property wealth into consideration.
“Lifetime mortgages enable money to be drawn down tax-free, which can be a sensible way for over-65s to fund retirement needs. However, everyone’s circumstances are different and it is important that these products, which do have some downside risks, are accompanied by specialist advice.”