Pensions minister Steve Webb says savers will be given estimates on how long they will live as part of the Government’s plans for at-retirement guidance following the Budget.
The Government has pledged to provide “free, face to face impartial” guidance to those about to retire as part of its shake-up of pension rules which will allow people to take their entire pension pot as cash from age 55 from next year.
In an interview with the Daily Telegraph, Webb says the Government want to provide savers with a rough life expectancy guide when they retire to help them make better financial decisions.
Estimates would be based on factors such as gender, where someone lives, and lifestyle factors such as whether a person smokes or not.
Webb said: “The idea is you come to think about retiring, [but] you do not know how long that retirement is going to be.
“What we do know is people get it wrong and they underestimate how long they are going to live.
“At 60 most people will have parents still alive so the best guide they have got about how long they are going to live is their grandparents. That is two generations ago so they tend to underestimate how long they are going to live. “My idea … is to say to somebody, ’Look, someone of your generation, living in this part of the country, you’ve not smoked, someone like you could easily live for 27 years’.”