Life expectancy is increasing and it's increasing fast. The Government Actuary's Department says that the average life expectancy for a man in 1940 was just 57.33 years. By 1949 it had increased to 66.14. As a general rule, women can add a little over four years to this figure. Today the figure is even greater. Now the average life expectancy for a man is 84.7, and for a woman 88.5.

So what does this mean for you?

It means that for most people, you must stop thinking short term and start thinking long term. If you are investing, it really is no use thinking about the next year from an investment point of view. You need to think about your entire life as an investment horizon. Therefore, if you are a man aged 60, you have an investment horizon of 24.7years, your remaining life expectancy. It really doesn't matter about the next couple of years, what matters is what will happen over the next 23!