There are many unknowns when it comes to planning your retirement finances, but arguably the biggest is the question of how long your money may need to last. This challenge is illustrated in new research1 from Standard Life, which finds 80% of over-50s are underestimating their life expectancy and potentially storing up later life financial planning challenges.
On average a 66-year-old man can expect to live to 85 today while for women the figure is even higher at 882. Despite significant increases in life expectancy in recent decades, four out of five people are underestimating their potential longevity with just 10% of men and 6% of women correctly identifying average life expectancy.
As with any average, there will be those who live significantly beyond it, and government figures show there are over 600,000 people aged 90 and over in its latest data.3 Additionally, there is a 1-in-10 chance of living to 96 years old for a 66-year-old man, while a woman of the same age has the same chance of living to 98.2
The financial risk of living for longer than you expect is compounded by the fact over a third (35%) of over-50s admit they haven’t planned their income in retirement and only 14% of people who have planned have taken the length of their retirement into account.
While most people are not considering life expectancy in their retirement income plans, there are aspects of retirement finances which attract strong views. For example, 99% of over-50s say income security is a top retirement priority, while other factors, such as certainty of income (96%), ability to access cash (95%) and tax efficiency (93%) all rank highly.
Pete Cowell, Head of Annuities at Standard Life, said: “Planning an income that lasts throughout retirement remains one of the biggest challenges people face. Without a realistic understanding of how long retirement might be, it’s easy for retirement plans to fall short. This research shows a striking gap, with a 66-year-old man facing a 1-in-10 chance of living to 96 years old, yet most over‑50s significantly underestimate their longevity. That mismatch risks leaving people with income that simply will not go far enough.
“Taking the time to assess income needs, understand spending habits, and exploring options that can combine certainty with flexibility can make a real difference to people’s confidence in later life financial planning. A guaranteed income for life offers the certainty that many people are seeking, with annuity rates providing an annual income of £7,510 in 2025. Used alongside other retirement income strategies, lifetime annuities can help ensure essential needs are covered, providing stability and peace of mind whatever the future holds.”
Planning for longer lives
Research from the Standard Life Centre for the Future of Retirement shows that the shape of later life is changing. Longer lifespans, flexible working patterns and a shift towards defined contribution pensions mean individuals now carry greater responsibility for their financial futures.
People today retire about five years later than they did 30 years ago, and most see retirement as a gradual transition rather than a single event. 5 However, future generations face higher levels of financial risk, with 17 million estimated to be under saving for retirement. This highlights the need for realistic planning and the role of guaranteed income products in providing stability.
Catherine Foot, Director of the Standard Life Centre for the Future of Retirement, said: “Our ageing population is reshaping what later life looks like in the UK, and while longer lives are one of the modern world’s greatest achievements, we as a society have not yet responded in ways that truly help people make the most of this opportunity. There is an under‑saving crisis in the UK, and if we don’t act now, millions of people will reach retirement unable to afford the standard of living they expect.
“People need better information, clearer guidance, and stronger systems to be better protected and to help make confident choices that support financial security and wellbeing across a longer lifespan.”
[1] Research conducted by Opinium with a nationally representative sample of 2,000 UK adults aged 50 and over between 27 August and 1 September 2025.
[2] Office for National Statistics, life expectancy estimates
[3] Estimates of the very old, including centenarians, UK – Office for National Statistics – this is average cohort life expectancy which does not consider other factors that may affect life expectancy such as lifestyle or health conditions.
[4] Boost for retirees as annuity rates climb to 7.51% at end of 2025
[5] Changing Journeys: How we save, work and retire, Standard Life Centre for the Future of Retirement (originally published by Phoenix Insights, November 2024), pp. 3–12, 36, 11.
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