Prepare for the ‘retirement smile’ - what shorter healthy life expectancies mean for pension planning

London, Thursday 19, February 2025: New data out today from the Office for National Statistics (ONS) shows that despite modest increase in overall life expectancy, the number of years which can be expected to be spent in good health has fallen to its lowest level since the ONS began collecting healthy life expectancy (HLE) data.

Both men and women can expect to spend a lower proportion of life in ‘good’ general health, according to the data (1.8 years less for males, 2.5 for females). When the ONS first collected this data in 2011, men were expected to remain in good health until around the age of 63, and women 64. Today, they could both expect around 61 years of healthy life.

With people living longer but in increasingly poorer health, many retirees may find themselves spending more on care, insurance or other support services than anticipated.

Maike Currie, VP Personal Finance at PensionBee comments: “There’s a worrying shift in the UK’s longevity story: while life expectancy has recovered since the pandemic, the share of life spent in good health is shrinking. 

“We are not just living longer - we are living longer with illness, disability and care needs. This has far-reaching implications for policymakers, the NHS and our own personal finances. It’s important to distinguish between your “health span” - the active years - and your “care span”, when support may be needed and costs can escalate sharply. 

“Retirement spending can often be higher in the early years when we’re healthy, active and spending on travel and experiences. It then dips as life and mobility slows. It can then rise again sharply as health needs increase and care costs bite. Plotted on a graph, it looks like a smile: up, down, then up again.

“Later-life care can be prolonged and eye-wateringly expensive, yet the UK still lacks dedicated savings products to help households plan for this phase - a gap that disproportionately affects women, who typically live longer but retire with significantly smaller pension pots. The result is a growing mismatch between longer lives, shrinking healthy years and a system still poorly designed for the true costs of aging.”