An estimated 550,835 people in England and Wales were in their 90s in 2022, according to the latest data from the Office for National Statistics (ONS), released last week. That’s the highest total since ONS records began.
The number of people aged 100 and over has also increased – to 15,120, double the number in 2002.
h average UK life expectancy at 78.6 years for males and 82.6 years for females, reaching your 100th birthday might come as a surprise. The last thing you want is to run out of money. So we’ve rounded up eveHow much money do you need for retirement?
Every year, Which? analyses thousands of pensioners' spending habits to create three ‘income targets’ for retirement. This is the amount we think you’ll need in your pension (state and private) after tax is deducted.
Our latest targets are as follows:
Source: Find out more:Will the state pension be enough?
The current state pension for men born on or after 6 April 1951 and women born after 6 April 1953 is £203.85 a week or £10,600.20 a year.
And if you live alone, our research shows the state pension alone won't be enough to cover even the essentials.Find out more:How to make your pension last longer
As the state pension might not be enough for the retirement you want, that leaves a private pension.
As a single person, you’d need to make around £10,000 a year from your private pension to reach our ‘comfortable’ income target, or about £20,000 for the ‘luxury’ target.
Crucially, you’ll need that to be coming in for potentially more than 30 years if you retire at 66 and live to 100.
Investment platform AJ Bell says the best way to do this is to buy an annuity: ‘The surest way to make your pension last a lifetime is to buy an inflation-protected annuity – an insurance product which pays a guaranteed income for life.
‘If you’re going to go down this route, shopping around for the best rate – and making sure your provider knows of any health conditions which might impact on your life expectancy – is essential.’
Buying an annuity is complicated, and since it’s a lifetime commitment it’s important to get it right.
Find out more:How else can you make your pension go further?
Buying an annuity has become less popular since the pension changes of 2015 came into effect. Since then, most people have opted to ‘draw down’ on their saved private pension pot, taking part of it at a time, or all of it at once.
Depending on how much you’ve saved in your lifetime, this could be enough to fund your retirement. But it’s not a set rate of guaranteed income for life like an annuity is.
Private pensions are invested in the stock market, so this approach doesn’t necessarily mean you’ll ‘run out’ of money. In fact, the pot should still grow if the fund is managed well.
Find out more:How to make sure you save enough
A 2023 survey from pension provider Aegon found that 45% of people are worried about running out of money in retirement.
This was a greater concern than declining physical health (39%) for the 1,000 UK residents it surveyed. Protecting yourself from this possibility starts with saving early.
AJ Bell says a 25-year-old should save £350 a month (including employer contributions) to have £625,000 for retirement.
By law, your employer must put at least 8% of your earnings into your pension pot. The employer itself must contribute at least 3% of that amount (with, in this case, the other 5% coming from the employee).
With many employers, you can ask to contribute more of your monthly income to your pension, with the employer increasing its contribution proportionately.
If you’re in such a scheme and are only making the minimum contribution at the moment, consider increasing this to take advantage of the extra cash on offer from your employer.
Find out more:source https://www.which.co.uk/news/article/can-you-afford-to-live-to-100-aegk85U9qVed