Are you able to live to be 100 years old? How can you extend your pension?

People are living to be 100 years old at record rates

We go over how to extend your retirement with your pension.

Although it may be pleasant to anticipate a message from the King, the number of people living to be 100 has reached all-time highs, which may put additional strain on your retirement income.

According to the most recent Office for National Statistics data available, there were an estimated 625,000 people in the UK who were 90 years of age or older in 2024. This represents an increase of 2.2 percent since mid-2023 and 53.7 percent since 2004.

Although growth has been faster at the oldest ages, 84.5% of those over 90 were 95 years of age or younger.

BFIA's current problems. In the UK, the number of centenarians (those who are 100 years of age or older) doubled from 8,300 in 2004 to 16,600 in 2024.

The number of men over the age of 90 has more than doubled between 2004 and 2024, while the number of women has increased by about one-third. This indicates that the number of men at older ages is growing more quickly than the number of women.

In 2024, men made up nearly one-fifth (18.5%) of centenarians and one-third (33.7%) of those 90 years of age and older. All four UK countries have seen an increase in the number of centenarians, with Wales having the highest rate (25.9 per 100,000).

According to Steven Cameron, director of Aegons pensions, the numbers indicate that the "100-year life" is no longer a pipe dream. While living longer is a reason to rejoice, it also raises the question of how to determine when and if you are ready and able to retire.

Cameron asks, "Are we really prepared, both financially and psychologically, to manage a much longer life than anticipated by previous generations?

The century-long life.

In the UK, life expectancy at age 65 was 21.2 years for women and 18.7 years for men between 2022 and 2024. Between 2019 and 2021, there was an increase of 17 weeks from 20.8 years for females and 21 weeks from 18.3 years for males.

That might be taken into account when making retirement plans and determining how to access your pension fund, but if you truly have three more decades to live, the factors might be different.

"As more people live into their 90s, we all need to consider how we would pay for three decades or longer in retirement," stated Sarah Coles, head of personal finance at AJ Bell.

"It's worthwhile to use a pension calculator as early as possible to see what you might be able to accumulate by retirement and the income you're likely to be able to take from it. It's important to think about how long you could reasonably expect your pot to last if you need to take more. This procedure will determine if you should think about increasing your pension contributions. A "

Delaying retirement and working longer might be worthwhile if you want to make more money and keep your pension invested so you can access more in your golden years.

In order to increase your income later on, you could also postpone receiving your state pension.

How to extend your retirement until you turn 100.

According to Tom Selby, director of public policy at AJ Bell, purchasing an inflation-protected annuity that offers a lifetime income guarantee is the "surest way" to ensure that your pension lasts a lifetime.

"It's crucial to shop around for the best deal and make sure your provider is aware of any health conditions that could affect your life expectancy if you're going down this route," he says.

However, once you buy an annuity, you are unable to withdraw your pension funds from the product.

Selby continues, "Many people, especially younger retirees, prefer to keep their money invested through drawdown, which offers more flexibility and the potential to enjoy long-term investment growth."

"Those who opt for drawdown must interact with their fund and make sure they take out their money in a sustainable manner, among other things. The "

Based on the flat-rate amount in 2026-2027, a person wishing to retire today with an average UK salary of about 39,000 might anticipate receiving about 12,548 from their state pension. According to AJ Bell's calculations, this would require their private pension to provide an annual income of 26,452.

A 68-year-old may require a pension fund of about 570,000 in order to be able to withdraw 26,452 annually and still have their pension last until age 100 if you assume 3.3 percent annual investment growth in a pension and disregard taking tax-free cash.

A 25-year-old would need to save about 338 per month, matched by their employer, in order to save £570,000.

This is predicated on contributions rising in proportion to inflation and investment returns of 3.5 percent after fees.

The amount of pension fund required to reach age 100, however, might drop to about 550,000 if they postpone retirement until age 70.

According to Chris Rudden, head of investment consultants at Moneyfarm, "from a financial perspective it is now almost prudent to assume you will reach 100, but in order to accommodate this, the old financial playbook possibly needs rewriting for a new era."

"As people get closer to retirement, it's important to get the risk levels right by not necessarily adhering to the outdated norms that say they should be in low-risk investments because their money needs to be protected."

"Make sure your money keeps growing at a rate that keeps up with people who are living better lives and have lofty aspirations long after they retire. Don't forget about your future self because slowing down isn't the solution. The "

Rudden advises actively managing your savings and pensions to make sure they are at the appropriate risk level for you and that you continue to top them off even after retirement.

According to him, "the majority of policies in the pension industry are predicated on assumptions that might not be favorable if you are to live to 100."

For example, many plans automatically switch to a de-risking strategy when you get close to 65, but times have changed, and if you need your money to grow for another 30 years or more, that might be too early.

But in some ways, life is just getting started at age 65. Therefore, you shouldn't simply put all of your money into low-risk bonds at age 65 and then leave it to fester for the next 35 years. The "

If you are living longer, there might be additional health and care expenses to take into account, which could reduce any inheritance you intended to leave.

For this reason, a lot of financial advisors advise you to enjoy and spend your hard-earned pension funds before you become too old.

According to Ross Lacey, director of Fairview Financial Planning, "we often encourage our clients to consider spending more in the early years of retirement while they have health and time on their side."

"Even though they may still be alive in their 80s and 90s, their capacity and desire to do things are unavoidably diminished. Everybody eventually grows too old to have fun. The "