How to make a long life a better life too

Life expectancy has risen consistently for decades and people are living longer than ever before. Analysis by the United Nations Population Division shows that, globally, average life expectancy rose from 46.5 in 1950 to 71.7 in 2022.

This increased longevity positively reflects the progress we have made as a society and the advances we have seen in health, science and technology over recent decades. However, we must remember that living longer is not an end in itself. Yes, people want to live longer but, critically, they want to live longer, better.

The challenges of achieving this are considerable, as outlined in Living Longer Better: Understanding Longevity Literacy, a new study by the World Economic Forum and Mercer. To attain a certain quality of life in old age, significant efforts are required from individuals, employers, financial services providers and governments.

The implications of living a higher quality of life for longer are complex, involving both financial and physical well-being. In order to finance longer life, continuous investment in skills development and flexible working options for our global workforce is needed. Opportunities for continued learning and working differently as individuals get older will become increasingly important.

Today, as individuals are likely to live longer than generations that have gone before them, they must consider their own health and the health of relatives they may need to support in older age. Two-thirds of those surveyed by the World Economic Forum and Mercer expect to have to provide physical caregiving for older family members in the future, while over a third overall expect to have to provide financial support.

The financial positions of individuals today are very different from generations past. The days of final salary pension schemes and defined benefit pension plans are coming to an end, and it is widely accepted that existing state pension systems in many of the world’s largest, wealthiest economies are unsustainable.

Individuals are taking far more responsibility for their financial futures. Yet, worryingly, 55% of those surveyed either acknowledge they have not saved enough or remain unaware of how to build financial resilience and reach the levels of income needed for retirement.

This is particularly concerning considering that 44% of those surveyed under the age of 40 indicated that they would like to stop working by the time they are 60 or potentially even earlier.

In this context, the difficulty that individuals face in finding trusted, reliable financial advice becomes even more acute. People under the age of 40 are eight times more likely than older generations to seek financial advice from social media. Data shows that 42% of Generation Z follow and buy from TikTok accounts. Yet, the financial services sector is not keeping pace with generational buying habits. As of December 2022, the most popular UK and US banks did not have any TikTok content to engage and inform younger generations.

With individual needs and levels of financial literacy evolving over time, there is a clear imperative to make high-quality, tailored advice available rather than a one-size-fits-all approach that will lead to poorer outcomes. Governments and employers are currently best placed to meet this imperative because they both touch the entire population of active income earners and are relatively trusted as sources of advice. Private-sector financial service providers also have an expanding role to play.

It is important to keep in mind there is more to living better than a comfortable retirement. The three-stage life model – school, work, retirement – is increasingly outdated. It is becoming more common for individuals to have a multi-stage life, moving in and out of the workforce, changing careers, taking career breaks, retraining and going back to school, for example. The path may not be linear and may vary greatly depending on individual needs and desires. Employment policies, practices and models are not yet aligned to this shift.

What does all this mean in practice? The challenge of making sure a longer life is a better life cannot be the responsibility of a single group. It requires the combined efforts of individuals, employers, governments and financial services providers:

At Mercer, we work closely with corporations and governments to help guide and develop approaches, frameworks and platforms that can support individuals and promote well-being, increase flexibility and provide the tools needed to help employees live longer, better and more fulfilling lives.

Experiences inevitably vary – be it a multinational technology corporation, a financial services leader or a luxury retail brand – but it is encouraging to see organizations are now taking action, working in the type of partnerships that we believe offer the best solution to reflect the challenges to living longer and living better that lie ahead.

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