Is your pension as healthy as you are?

If you live to 100 rather than 80, you will need double the amount of pension savings.

It’s generally agreed that we are all living longer. A man who’s currently 65 is expected to live to age 83, and a woman is expected to live to age 86. But the number of centenarians living in England and Wales is at a record high with 13,924 people aged 100 or older in 2021, according to the Office for National Statistics.

Our calculations show that retirees who end up living until they are 100 will need double the amount of pension savings compared to those who live until they are 80.

Want to enjoy a moderate* lifestyle in retirement? Here’s what you’ll need:

Remember that the value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.

*This means having one foreign holiday a year and eating out a few times a month, according to the Pensions and Lifetime Savings Association

The 4% rule

The "4% rule" has long been a figure cited by research in the US as something that is sustainable for most people. It suggests that if you withdraw 4% of your pension pot in the first year and adjust this amount each year for inflation, your savings should last for 30 years.

However, like all rules of thumb, it's based on certain assumptions. You need to bear in mind your state of health and your propensity to spend - this is likely to be higher the younger you are and lower the older you are.

You also need to bear in mind your attitude to risk and capacity for loss.