What living longer means for your pensions and retirement planning

The number of centenarians continues to surge. According to ONS data, an estimated 15,330 people reached the age of 100 in 2024 in England and Wales. Compare this to 20 years ago when only 7,630 people could say the same.

Women continue to vastly outnumber men when it comes to getting that all-important telegram from the King. In 2024, we saw 12,500 women reach that milestone compared to just 2,830 men.

The fact we are living longer is a real positive, but it also has major impacts for both pension policy and our longer-term financial planning.

Read more: How to contribute to a loved one's pension

For a start, increasing numbers of older people means the state pension bill continues to swell and this gives the government an ongoing financial headache.

With a review into state pension age ongoing, we will see further debate on whether the timetable for state pension age rises needs to accelerate and whether we will see rules put in place for a state pension age rising into the 70s.People living longer has major implications for pension planning and policy. ·MoMo Productions via Getty Images

The prospect of living into our 90s and beyond also has massive implications for our own pension saving. If you were hoping to retire at age 65, do you have the means to generate an income that could last 35 years or more?

Getting cracking early is key – the longer you save then the more time you have for your money to grow.

Here are some more tips to help you grow your pension so it can last for the long-term.

Small actions, such as boosting your contributions every time you get a pay rise or new job, can really boost how much goes into your pension long-term. If you do it straightaway before you get used to having the money to spend it will be easier. You should also make sure you are getting the most from your employer’s contributions. If they are willing to offer an employer match, whereby they increase their contribution if you boost yours, then this can really power up your pension saving. If you are worried about not having enough put away, then make use of online pension calculators. If you input how much you have already saved, they can tell you how much that is likely to give you in retirement. This gives you the opportunity to fill any gaps if needed. Making sure that you’ve tracked down lost pensions from previous jobs is a good way of strengthening your position – you could find a pension worth several thousand pounds that you had forgotten about. You may decide that once you’ve got your pensions together, it’s worth consolidating them. It can cut down on time, admin and even save you money. Having one overarching view of what you have can also help you make better retirement income decisions. However, before you take the leap in consolidating, make sure you aren’t missing out on benefits, such as guaranteed annuity rates, or incurring expensive exit fees. Finally, another challenge of these longer lives will be the impact of inflation. This can nibble away at your purchasing power and mean that what was once a decent retirement income becomes very stretched. Those in the market for a guaranteed income through an annuity will need to consider this when they are deciding whether to opt for an inflation linked versus level annuity, and those using income drawdown will need to ensure that they don’t take out too much income too early and leave themselves stretched later on.

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Three key issues for the Pension Commission How your health can affect your pension How much money do you need to retire?

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