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Are you ready for your 100-year life?

What happens to your pension when you die?

Written by Retirement Line Updated: 11th June 2024

There are more people aged 100 or older in the UK than ever. That’s great news, but some thought may be needed to plan for a 100-year-life and a long but fulfilling retirement.

According to the latest data from the Office for National Statistics, there were around 15,120 people aged 100 or more living in England and Wales in 2022. It means the number of centenarians has more than doubled in the 20 years since 2002.

With advancements in healthcare and lifestyle choices, the idea of living to 100 years old is no longer a distant dream but a potential reality for many of us today. However, preparing for such a potentially lengthy journey requires careful planning and consideration.

The topic is something that authors Lynda Gratton and Andrew Scott explore in their book ‘A 100-Year Life’ in which they predict a “fundamental redesign of life”. In it, Gratton and Scott argue that our longer lifespans need a change in how we approach work, education and retirement.

The implications on individuals, societies and economies all need to be considered. For example, as life expectancies continue to rise, the government is already gradually increasing the State Pension age. But how many of us will be able to keep up with the pace of work until our late sixties or even into our seventies, which is when some people are predicting the State Pension age is headed? 

Without proper financial foresight, we risk outliving our savings and potentially facing financial hardship in our later years. But planning ahead for a 100-year-life isn’t just a financial issue. Your social and emotional well-being will also benefit from proactive planning. 

So, what kind of things should we be doing to prepare ourselves for a 100-year-life and a long but fulfilling retirement? We’ve put together a few suggestions so you can start planning ahead now.

Please note that this article does not constitute advice: please seek professional financial advice or guidance to help you make decisions about your retirement income.

Maximise your pension contributions

To plan financially for a 100-year life, you may need to build a pension big enough to provide for yourself in retirement for 30 years or more.

Since the pension reforms of 2015, savers can now access their defined contribution pension schemes from the age of 55 (rising to 57 in 2028). If you don’t need to access your pension at this point, then you can grow your fund further by leaving it invested and continuing to pay into it until your retirement.

If you can afford to, consider increasing the percentage of your salary that you contribute each month to your pension to give your fund an extra boost. You may also consider delaying your retirement to give you time to contribute even more to your pension scheme.

Read more: How to increase your pension pot as you approach retirement

Understand your pension options

We all want to get the most from our hard-earned money, so use your time now to understand which pension options you have and what will work best for you. This will help you to ensure you have enough set aside to cover the essentials and make up any shortfalls while you are able to.

If you have a defined contribution (DC) or defined benefit (DB)  pension, then you should start by gathering up-to-date statements to see what your current forecast is.

For DC pensions, you have a few options to consider when it comes to turning your pension savings into income. It’s important you weigh up all the benefits and drawbacks of each and consider which one/s might complement your retirement plans best. Your main retirement income options from DC pension savings include an annuity or income drawdown.

Consider delaying your State pension

If you reach State Pension age and defer receiving it for one year or more, then the payments you eventually receive will be higher for life. If you’re planning for a 100-year life, you may welcome this lifelong boost to your monthly retirement income - but do remember that you will be missing out on your State Pension initially. 

Read more: Should you delay retirement?

Embrace later life learning

Retirement marks the beginning of a new chapter, offering the freedom to explore passions and interests that may have been neglected during our working years. With the prospect of a 30+ year retirement ahead of you, consider enrolling in an adult education course to enjoy learning in later life. 

From photography and joinery to learning a new language – you could even volunteer for organisations that align with your interests to gain more experience. Lifelong learning not only keeps the mind sharp but also adds richness and fulfilment to your retirement years.

Prioritise health and wellness

It isn’t just the length of a person’s life that is important, it’s the quality of it. Living a 100-year life is going to be so much better if you’re fit and able to do the things that make you happy. For that, prioritising your health and wellbeing is critical. 

Make time for regular exercise, focus on maintaining a balanced diet, and attend your routine health screenings to catch any potential issues early. You could also consider taking up stress-reduction techniques such as meditation, yoga or even a simple walk into your daily routine to promote overall well-being.

Widen your social circle

Retirement offers a fantastic opportunity to cultivate deeper connections with family, friends, and community. This is important as loneliness and isolation are a significant issue for many people in later life. 

If you have young children in the family, offering to look after them when you’re able won’t just help working parents with childcare costs. Spending time with the youth of today is a fantastic way to nurture family bonds while keeping yourself busy and active. Plus, taking them to weekly groups is a great way to meet other grandparents to socialise with.

You can also check your local community hall for events you can attend and social clubs to join. Signing up to your local gym or volunteering at an organisation you care about is another way to meet like-minded people. 

It may seem daunting to take those first steps to join something new, especially if you don’t already know somebody there. Try to challenge yourself. Making new friends and maintaining an active social life can provide a sense of belonging and support as you navigate the journey of a 100-year life.

Plan for transitions

As you approach retirement, consider how you will navigate potential later life transitions, such as downsizing, relocating or reducing your hours to start part-time work. 

Take the time to develop a comprehensive plan that addresses both practical considerations and emotional adjustments. Seek support from your family and friends, consult financial advisers and research all your options to ensure a smooth transition into this next phase of life.

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