How to increase your retirement savings as more people are expected to live to be 100 years old

The ONS estimates that 12% of boys and 19% of girls born in 2024 will live to 100, making later-life planning more crucial than ever

It used to be uncommon to reach the age of 100, but data indicates that this will change in the future.

According to the most recent data from the Office for National Statistics (ONS), a tenth of boys (12%) and a fifth of girls (19.1%) born in 2024 are predicted to live past 99.

In 2049, this is predicted to increase to 18.3% of boys and 26.3% of girls. In contrast, the life expectancy for a girl born in the UK in 2024 is 90.2 years, while for a boy it is 86.9 years. However, by 2049, these figures are expected to rise to 92.4 and 89.6 years, respectively.

BFIA's current problems. Older adults' later life outcomes are also improving. In 2024, women who turn 65 can anticipate an additional 22.7 years of life, whereas men in the same age range will typically live an additional 20 years. According to ONS data, this is an increase from 20.4 for women and 17.6 for men who turned 65 in 1999.

The burden of financing retirement for a longer period of time comes with a longer life expectancy, according to the latest videos from IMG.

"The great unknown in retirement is how long we can expect to live," stated Sarah Coles, head of personal finance at investment platform AJ Bell. A "

We look at ways to increase your retirement savings and pay for care in later life in this guide.

How to increase your pot and prepare for retirement.

Using the ONS's life expectancy calculator, which provides you with an approximate age estimate based on your age and gender, is a good place to start.

For instance, the calculator indicates that a 45-year-old woman should live to 87 under current projections. The average lifespan for a 55-year-old man is 84.

Using a pension calculator to estimate your expected pension income in retirement is also worthwhile.

In order to determine whether you're on track to reach your desired annual retirement income, the MoneyHelpers calculator asks you questions about your gender, age, current income, when you want to retire, and your current workplace and private pension contributions.

There are things you can do to increase your pot if you find yourself falling short.

Raising contributions to pensions.

One of the best ways to increase your retirement fund is to increase your pension contributions, particularly if you start early and allow savings to compound.

Contributions to a workplace pension or a private pension, such as a SIPP, can be increased.

Under auto-enrollment regulations, the minimum contribution to a workplace pension is currently 8%, which is composed of 5% of your wages and an additional 3% from your employer. However, you have the option to increase these contributions.

The government will also provide tax relief for money added to a pension, which is additional money that you would have otherwise paid in taxes.

"The most effective step (for boosting pension pots) remains increasing pension contributions early, even modestly, as time and compound growth do the majority of the heavy lifting," stated Adam Cole, retirement specialist at wealth management company Quilter.

"Many people continue to base their contributions on minimum auto-enrollment levels of 8 percent, which are unlikely to generate a sizable enough pot to sustain a comfortable retirement. The "

Additionally, you may be able to lower your overall income tax and National Insurance burden by enrolling in a pension salary sacrifice program with your employer.

Examine workplace pension funds that are in default.

You will be placed in a default fund when you are automatically enrolled in a workplace pension, which means your contributions are invested and handled on your behalf.

According to Nest, a significant UK workplace pension provider, 99 percent of its 14 million members are enrolled in a default fund.

You could switch to a different, riskier fund that might provide higher returns if your default fund doesn't match your risk tolerance.

Keep in mind that leaving a default fund will require you to manage your pension more actively, and your pot may end up worse off than if you had left it in the default fund.

Verify that your state pension is fully funded.

A full new state pension, valued at 241.30 per week as of 2026-2027, requires 35 years' worth of National Insurance contributions (NICs). To be eligible for any new state pension, you must have at least ten years of NICs.

You might not have enough qualifying years to get the state pension you desire, though, if you took time off work to care for a loved one or your children.

The government's tool can be used to determine your expected state pension amount. You may be able to top off your NI record by paying for voluntary NICs or claim free National Insurance credits if you're not sure how much you want.

The state pension age will increase from 66 to 67 between 2026 and 2028 and from 67 to 68 between 2044 and 2046, so you will need to wait longer to receive it. In the future, it might increase even more as life expectancy rises.

How to pay for retirement care expenses.

Later in retirement, care can be a substantial expense, but there are ways to reduce or help pay for it. An immediate needs annuity is one of the primary methods.

Annuities for immediate needs.

If you are not eligible for any free assistance from the NHS, you may purchase an immediate needs annuity to pay for your care.

Usually, a lump sum payment is used to purchase one, and any income is paid tax-free to the caregiver.

To keep up with inflation, some plans will also gradually raise the value of payments.

"An immediate needs annuity can take away the risk of nearly all the elderly person's assets being swallowed up by care costs if they do end up needing an extended period of care," stated Emma Walker, director of the retirement firm Just Group.

"The remaining value of the estate can be effectively protected by paying the annuity premium, which ensures a flow of sufficient income and eliminates investment risk. A "

Additionally, you can purchase deferred needs care annuities, which begin to pay out months or years after you anticipate needing care.

Because you are older when they are triggered, deferred needs care annuities can be less expensive than immediate needs annuities.

In the event that annuity rates decline in the future, locking in a rate early may result in larger payments.

In another piece, we examine how equity release can be used to pay for care expenses.