How financial planning can help align your life, health and wealth

Retirement is no longer necessarily a short period at the end of your working life.

The latest Office for National Statistics (ONS) figures show that someone reaching 65 in the UK can expect to live for a further 18.7 years if they are male and 21.2 years if they are female. Meanwhile, the number of people aged 90 and above reached around 625,000 in 2024, up 53.7% from 2004.

That means a retirement lasting two or three decades is increasingly likely, and this has significant implications for your money.

There are several ways you can plan for a potentially longer retirement, including:

• Staying in work for an extra year or two
• Phasing your retirement
• Drawing on your wider resources by downsizing, renting out a second property or spare room, or making use of other assets
• Reviewing how your savings and investments are structured to ensure they’re allocated in preparation for a potentially long retirement

Aside from your retirement planning, there’s also your estate. If you live longer than expected, you might need more of your wealth for yourself, which can affect how much you pass on.

So, a longer lifespan comes with multiple financial planning considerations, and while you can’t know how long your life will last, you can build a plan that works across a range of possibilities.

While your lifespan is how long you’ll live, your health span is about how long you’ll stay in good health. The two are not necessarily the same.

The ONS estimates that in 2022–2024, healthy life expectancy at birth in the UK was 60.7 years for males and 60.9 years for females.

These figures are based on the number of years people can expect to spend in good health, rather than simply being alive. They suggest that many people could spend a significant period of later life in less-than-good health – though of course, many people are healthy far beyond these years, which can also lead to higher spending in retirement, as they may need more to fund an active lifestyle.

As your health changes, your spending may also change. For example, you might have to retire early due to poor health and then have to pay for home adaptations, care, or medicine. Or you may stay healthy for many years but then require long-term care for the last years of your life, which can be very costly.

Of course, everyone’s experience will be different, but it’s important to recognise that retirement spending is unlikely to be completely flat throughout your life.

Planning around your health span means thinking about how you want to use your healthiest years and making sure your finances give you the freedom to do so.

It also means considering what could happen if you need care later in life, and how that might affect the wealth you hope to leave behind.

The third span is your wealth span, which refers to how long your financial resources can support the lifestyle you want.

Your wealth span can be affected by your:

• Pensions
• Investments
• Inflation
• Tax
• Spending

The key question is: how long can your money support the life you want to live?

That question can then lead to further useful conversations about your finances. Perhaps you need to save more for retirement. Or maybe you need to reconsider your withdrawal strategy to ensure it remains tax-efficient for longer. And perhaps the answer changes depending on how long you live and how your health develops.

It’s important to consider your lifespan, health span, and wealth span together and to understand the financial implications of their connections:

• If your lifespan is longer than your wealth span, there’s a risk that you could run out of money.
• If your health span is considerably shorter than your lifespan, you may spend more years needing support or care than you planned for.
• And if your wealth span is significantly longer than your lifespan, you may have been more cautious with your money than you needed to be. This could mean you missed opportunities to enjoy your retirement or that you may have a larger and potentially less tax-efficient estate than you intended.

While none of these outcomes is inevitable, they highlight why financial planning is about understanding what your money is for, when you are likely to need it, and how your circumstances could change your plans.

Your lifespan, health span, and wealth span are not fixed. That’s why financial planning should be an ongoing process rather than a one-off calculation.

At Amber River, our Life Landscaping approach is designed to help you visualise your future and build a financial plan around the life you want to have.

It has three stages:

1. Lay of the land – First, we get to know you, find out what matters to you, and the kind of life you want to lead. We also explain how our advice works, including our charges and what you can expect from the relationship.
2. Your life plan – Then, we turn those conversations into a bespoke financial plan. We look at your existing arrangements, understand what is working, and identify where changes could help you achieve your goals.
3. Ongoing monitoring – Finally, we continue to monitor your plan and meet with you at agreed intervals to make sure it remains appropriate.

None of us knows exactly how long we will live, how long we will remain healthy, or what the future will cost. But uncertainty does not mean you can’t plan.