The start of a new year inevitably comes with thoughts of the future – and, with people living longer than ever before, it could be a rather long future for many. As 2025 kicks into gear, how should individuals and investors think about longevity financing?
Towards the end of 2024, the International Monetary Fund (IMF)1 foresaw a period of ‘stable but underwhelming’ global growth for the year ahead. The prediction also included a return to a more neutral monetary policy stance as inflation in most economies steadily falls towards national targets in 2025.
Thinking through the ‘longevity megatrend’
The IMF forecast also highlighted some structural challenges that are expected to temper global growth, with an ageing population being one of the most prominent. As well as impacting the economy, the unfolding ‘longevity megatrend’ is a global phenomenon, which presents a financial challenge at a personal level too as we live longer.
Research2 suggests most of us are vague when it comes to financing increased longevity – less than a third of 55 to 64-year-olds, for example, currently prioritise funding their retirement. Preparation and setting life goals typically makes us feel more in control of, and optimistic about our futures and is undoubtedly key to confronting the realities and practicalities of living longer. Such targets, though, do need to be focused beyond current life stages.
Advice helps longevity plans
Encouragingly, the research also found that people who use an adviser tend to be better prepared for later-life eventualities, whether that be financing retirement or providing support for loved ones.
Another element of longevity is successful communication. Advice helps clients successfully navigate the financial landscape as well as encouraging them to engage family in financial conversations; we can support you on all counts – it’s all in the planning!
1IMF, 2Canada Life, 2024
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.