Business

Getting old is bad for your wealth

SPRIGHTLY: Kane Tanaka has become the first-ever woman in Japan to turn 118

LAST month in Japan, super-centenarian Kane Tanaka turned a sprightly 118, which made her the nation's first ever 118-year-old.

She said she has lived through five emperors of Japan, which is some going, and proves that grannies are five times tougher than emperors.

Her grandson, Eiji Tanaka, a mere strip of a lad at just 60, said that in her nursing home in Fukuoka she still enjoys her two favourite treats, a bottle of Coke and a bar of chocolate. (Just think about that. How many of us will be at our grandson's 60th birthday party?)

The fact is that the world is getting older, and over here, we aren't doing too badly at growing older, either.

Average life expectancy in Northern Ireland, according to new figures this month from the Department of Health, is now 78.8 years for men, and 82.6 years for women.

They've also worked out our average life expectancy if we make it to 65, which is another measure they take every year. If you live to 65, you are likely to make 83 as a man, and nearly 86 as a woman.

The figures also show you are even luckier if you live in Lisburn or Castlereagh, the healthiest areas, and are particularly likely to have a long life.

The reason I'm taking you on this world tour of encroaching decrepitude is that, while increased health and longer lives are great news, they are bad news for our money.

In fact, they affect the age at which we will be allowed to access our personal or workplace pension.

We currently reach minimum pension age at 55. That's the age when we can efficiently draw money out of our pension. However, to reflect our increasing longevity, and also to encourage us to keep working (and paying taxes), the Treasury has announced a proposal to increase that by two years.

The government is planning legislation to raise the minimum pension age to 57 in April 2028.

Only firemen, police and armed forces would be exempt, although there is also talk of a ‘protection scheme' for anyone entitled to take pension benefits before 57 at the date of the consultation for these new proposals.

These individuals will have what's known as a ‘protected pension age'.

The changes will also fall in line with the increase in the age that we can take our state pension, which is now 66 but will go to 67 between 2026-2028.

It's no secret, at this stage, that the government keeps shifting the goalposts on when we can comfortably retire.

Put together the fact that we are living longer, and the fact that we can't get our hands on our money for longer, and you can see that we have a growing challenge. (I always think ‘challenge' is a better way of saying ‘problem'.)

No wonder the Office for National Statistics (ONS) is telling us the percentage of people working past retirement age has doubled in the last 20 years. Some want to, of course, but many do not.

Many of us, despite our creaking joints, simply cannot afford to retire just yet.

This all makes forward planning for retirement, and speaking to a financial adviser, more important.

After all, as Mrs Tanaka showed us, our retirement could be nearly half our life!

And now, in her honour, I'm going off to get a Coke and a bar of chocolate.

:: Michael Kennedy is an independent financial adviser and pensions specialist and can be contacted on 028 71886005. Further information on Facebook at Kennedy Independent Financial Advice Ltd or at www.mkennedyfinancial.com

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