Planing for retirement and the Royal telegram

In just seven weeks’ time, the Queen turns 93 and could be sending herself a telegram when she makes 100 in April 2026.

DID you know that in just seven weeks' time, the Queen turns 93?

This year her birthday actually falls on Easter Sunday, April 21. If she keeps going at this rate, she'll be sending herself a telegram when she makes 100 in April 2026!

Here's another interesting fact: her grand age already makes her the longest-lived British monarch in history, and still at her side at 97, her husband and well-known rally driver Prince Philip isn't doing too bad either. Must be something in the water in that house.

But the Queen is not alone in her longevity. Thanks to modern medicine, we are all living far longer than our grandparents did. However, this does mean we face many financial challenges they did not have to face.

Here are a few figures, as worked out by those financial boffins at the London Business School (LBS). If you are in your mid-50s today, you stand a 20 per cent chance of hitting 100 and getting your royal telegram. And just to show how medicine has come on, if you're in secondary school now, you're even better off, you stand a 50 per cent chance of making the 100.

Compare that to 1926, when the Queen was born. The average lifespan for a male wasn't much over 60, and people stood just a 1 per cent chance of reaching 100.

So what are the financial challenges of ‘the 100-year life'?

Luckily for her, the Queen doesn't have to worry about her healthcare or her pension. Her family wealth is around £67bn, and she personally has to scrape by on a paltry £394m, according to latest estimates by Forbes magazine.

For us commoners, however, things are different, and we face three important challenges, financially speaking.

First challenge: our working lives will have to be longer, to fund our longer lifespan. You can see the government already acknowledging that by gradually raising pension age.

It's crucial, therefore, that during our longer working life we sustain an unbroken record of saving into our personal or workplace pensions – but there's an increased possibility that, at some stage, we may have to give up work due to illness.

Stopping work often means losing a major part of your income. The Association of British Insurers (ABI) tells us more than 60 per cent of working families would lose over a third of their income, if the main earner had to stop work, and four in 10 would see their income drop by half.

If that happens, Legal & General tell us that the average UK employee has enough savings to keep the household for just 32 days, if they stopped earning, but they note that only one in 10 of us has insured ourselves against it.

In an age when medical advances are protecting us better than ever, we can take comfort in the fact that seven out of 10 heart attack victims now survive - it was just three out of 10 fifty years ago - but a heart attack will still lay you low, and take you out of the workplace for a while.

The other big critical illness, of course, is cancer. The National Statistics Office tells us that more than half of us will get some form of cancer in our lives.

To protect ourselves against such unexpected eventualities, it's well worth looking at critical illness insurance, which pays you a tax-free lump sum if you're hit by a life-altering disease. Besides cancer and heart attack, you can be protected against the financial fallout of a stroke, MS, major surgery and a whole range of other ailments.

Which brings us to the second challenge: pension provision. We need to look at stepping up our pension provision today, to ready ourselves for our longer life.

LBS tell us that we have to stop basing our life planning on what our parents did. They saw life as three stages: education followed by about 40 years of work followed by a (relatively short) retirement.

For us, frustratingly healthy and full of life as we are, the goalposts have moved. Retirements are getting longer, and working lives will have to adapt to compensate. LBS say that someone saving 10 per cent of salary would have to work into their 80s, just to provide a pension of half their working income, if they're to live until they're 100.

If you're hoping to see your Royal telegram, or retire before the Lord retires you, then you can take the third challenge.

Pick up the phone and do something about it. Now.

:: Michael Kennedy and Shaun Doherty are independent financial advisers and pensions specialists and can be contacted on 028 71886005. Further information is available on the Facebook page 'Kennedy Independent Financial Advice Ltd' or the website

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