How old do you feel? For me, personally, it depends when you ask me. There’s certainly some days where I feel older than my prescribed ‘true age’, and then other moments where I am sure I’m far younger. But that’s the point, isn’t it? The time elapsed from our original birthday to now doesn’t define us. Some days we feel fresh, vibrant and shocked that 50 or 60 have been and gone, and then others we feel the polar opposite. So, with this in mind, is there such a thing as retirement age?
There seems to be an instinct in humans where we think things are worse than they actually are. I recently read a terrific book by a World Health Organization professor and statistician called ‘Factfulness’ which really shines a light on something the authors call the ‘negativity instinct’. Most people assume things like crime, health, poverty and just general life is getting worse and worse, year on year. But, in reality, things are far better than they used to be. Crime is way down, extreme poverty has halved since the 60s, and life expectancy has grown in every country.
Now, most people will know that life expectancy in the UK has grown enormously over the last few decades and, on average, a person born here today will live to over 80 years old. But did you know that the global average is not too far behind? I certainly didn’t. On average, in all the countries of the world combined, the global life expectancy is now over 70. But most people get this wrong. In the book, the professor analysed responses from thousands of people across the world and found that the most popular answer was that the global life expectancy was about 60 years old, which would have been accurate if it was 1973.
This ‘negativity instinct’ informs everything we think and do. For retirement planning and the retirement finance sector as a whole, we need to have a rethink about what really defines old age. 65 has been a number embedded in the consciousness of retirement planning for quite some time, but is it time to move on?
The ONS reports that ‘In 2018, a man aged 65 could expect to live for another 18.6 years, while a woman could expect to live for 21 more years. So, on average, at age 65, women still have a quarter of their lives left to live and men just over one fifth.’ The medical advancements and improvements in later life health have also meant that many more people continue working past the traditional retirement age. Since 1993, employment rates for the over 65s in the UK have doubled, and even the slightly younger cohort of 50 – 64 year olds have seen their employment rate increase by one third. So is 65, really 65 anymore?
Ultimately, there needs to be a sea-change within the way we see old age. We are still stuck in a 1970s headspace and this will have negative consequences for the industry and, most critically, our customers if we and others such as the media, have a false view of our customer base. Whilst product innovation has come on leaps and bound we need to be able to market to and advise our customers with a true understanding of how they see themselves, and the mainstream media also need to understand this.
Today’s 70 year olds do not feel 70. It is this ‘subjective age’ that will become ever more important as we continue to develop retirement planning and finance. We need to understand, and then react accordingly, to people’s subjective ages. Studies have shown that most people actually feel about 8 years younger than their ‘chronological age’ – so what does that mean for our industry? Does it mean we are nearly a decade out of step? Perhaps it does.
However, what is for definite is that we need to be aware that looking at someone’s age and making a judgement based solely on that, needs to change. We need to be hyper-aware that our customers may be all over the spectrum when it comes to their ‘subjective age’ – some may feel older, but most will feel younger. And we need to consider this more when we plan our approach to their equity release plans.
It may sound like a new minefield of complications – understanding the ‘subjective age’ of one 70 year old versus another 70 year old – but if we can master this it will only help us understand, help and care for our clients in smarter, more effective ways. In essence, age is just a number and we’re better off forgetting it.
