After a lifetime of hard work, getting older should be a time to relax and enjoy the fruits of your labour without worrying about whether those fruits will ripen to their full glory or wither and die on the branch. But the combination of longer life expectancy and problems with pensions and investments has led to some rather bad changes.
At the moment, the official retirement age is 65, but many people retire before this. Many people leave work at 60, and it's not unusual for people to retire even earlier than this. This means that many people can look forward to 25 or 30 worry-free years of being in charge of their own lives. This is especially true if they saved enough for their old age while they were working, especially in the form of life insurance or coverage for critical illness.
But not everyone is so lucky, and the misery of trying to live for a long time on a small government pension with no relief in sight is better imagined than lived. But the stated plan to raise the retirement age to 68, which will unfortunately push retirement into an uncertain future, could be an opportunity.
Why shouldn't this longer time spent working be used to save money to protect you when you retire? It makes sense, doesn't it? Until you read the "fine print," where you find something called the "Age 70 Rule." Because of this rule, people over the age of 70 can't just put money into life insurance or protection policies. Instead, they have to take out investments.
What's the difference? A fair question! Because of strange rules, many intermediaries aren't allowed to sell investment products, so they can't sell these or protection policies to clients who are over 69. This can and does cause many older people to not know about these products and, as a result, not buy them.
There needs to be a review, especially since the retirement age is going to change and more and more people are getting older. It looks like the Financial Services Authority wants to change the rules, but we don't know what those changes would be yet. They are reportedly thinking about two options: raising the age limit for the ruling to 80 or getting rid of any age limit at all.
The Association of British Insurers wants the age limit to be removed because any change should be toward a more accurate risk-based option (rather than the "black and white" age criteria). They say that this would give customers more things to choose from.
Taking into account the fact that the average age of the population is going up, it seems like putting off the restriction for another ten years would just push the problems that come with it further into the future without solving the real problems. The length of mortgages is also a factor. The commonly accepted "maximum" mortgage term of 25 years has been thrown out the window, and many people are getting mortgages later in life. This financial commitment is an extra worry for the elderly, who are probably already having trouble making ends meet and would have a lot of trouble if something happened to their income.
A change in the rules wouldn't hurt anyone, but it would give the older generation more peace of mind and a safer future.
