If you were to think about how long you expected to live, then the chances are you would look at the older generations of your family and use that as a guide. However, the reality is that you could be living significantly longer.
We’ve seen the number of centenarians continue to grow in the UK, and recent life expectancy data shows that a girl born in 2024 can expect to live to just over 90 on average. For boys, it’s getting close to 87. More than 19% of those girls and 12% of boys could live to hit their 100th birthday. To live such long lives is incredible, but it does need to be prepared for.
Retirement could last longer than you think
Data shows that men and women aged 65 in 2024 can expect to live 20 years or more in retirement. This may be significantly longer than many were expecting.
So, paying attention to our pensions will be all-important.
Auto-enrolment is playing an important role in getting the nation saving for retirement, but it’s important to check in and see how you’re doing.
Taking the time to think about what we want our retirement to look like will give us an idea of how much it might cost. You can then make use of tools like online calculators to get a sense of how much your pensions are on track to give you. If you find that you’re falling short, then you’ve still got time to do something about it.
Taking small steps like boosting your contribution when you get a pay increase or a promotion can make a big difference, and you should also make the most of any employer contribution.
Some employers are willing to put more into your pension if you boost your own contributions – this is known as the employer match and can be a great way of really boosting that pension.
Find out how much your pension could be boosted with our pension calculator.
How to find and manage old pension pots
You should also take care not to lose track of any pensions as time goes on. This is easily done as we move from job to job, but it could leave you thousands of pounds out of pocket in retirement.
Take the time to go through your pension paperwork. If you think you may have lost track of a pension, then a call to the government’s Pension Tracing Service can help you find it.
All you need is either the name of your employer or that of the pension provider. The helpline can’t tell you if you do have a pension, but they can give you contact details so you can get in touch with them. Even the smallest of pots can grow over time, so that tiny pension you had years back may now be a sizeable sum.
Depending on your needs and the kind of pensions you have, it could also make sense to consolidate and transfer your pension pots to one easy-to-manage account, like the HL Self-Invested Personal Pension.
This isn’t personal advice. Before transferring, check that you won’t lose valuable guarantees or have to pay high exit fees. If you’re not sure if an action is right for you, then ask for advice.
Preparing for State Pension changes
Making sure your pension planning is as robust as possible will also help you navigate any changes to state pension age.
State pension age will hit age 67 in 2028, and there’s also an ongoing review that could see further changes. As more of us live longer, the government will look at different ways to manage the burgeoning bill, and they could choose to bring the shift to age 68 forward or even put in place a timetable to age 69 and beyond. The normal minimum pension age for private pensions typically tracks ten years below state pension age. Currently, private pensions can normally be accessed from 55; this is rising to 57 in 2028.
Having a good level of pension will fund your longer life and will be a vital source of income should you need to retire before state pension age.