Savers in the UK will outlive their pension pots by more than 10 years, according to the latest research.
The World Economic Forum (WEF) published a report that found that people’s retirement savings were not increasing at a quick enough rate to cope with the increase in life expectancy.
The report found that the average man in the UK will outlive their savings by 10.3 years, while the average women will outlive their savings by an average of 12.6 years.
The WEF used the fund strategy adopted by Nest, the pension scheme backed by the Government, as a model for their UK analysis.
The report focused on individuals choosing investments, emphasising that savers should focus on long-term benefits, analysing the long-term returns on investments.
Han Yik, Head of the Institutional Investors Industry at the WEF, said: “The real risk people need to manage when investing in their future is the risk of outliving their retirement savings.
“As people are living longer, they must ensure they have enough retirement funds to last them through their long lives. This requires investing with a long-term mindset earlier in life to increase total savings later on.”
The WEF has called on Governments to act on the shortfalls to ensure that savers can enjoy retirement. However, they have also warned against implementing a “one size fits all” policy for pensions, insisting that the individual needs of savers are vitally important.
The report also urged world Governments to consider reforming investment freedoms, allowing individuals to choose funds which are expected to generate strong returns in the longer term.
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