Pessimists not saving enough for retirement

People are not saving enough for retirement because they are unduly pessimistic about how long they will live, researchers have warned.

The Institute for Fiscal Studies (IFS) found people in their 50s underestimated their chances of survival to 75 by around 20 per cent and to 85 by around 10 per cent. People in their late 70s and 80s were on average “mildly optimistic” about surviving to 90, 95 and above.

The paper, Subjective Expectations Of Survival And Economic Behaviour, said life expectancy is a “crucial component in a range of economic decisions”.