Planning ahead for your 100-year life

Could you have a 30+ year retirement?

Old age is a privilege that some are sadly not afforded, but thanks to advances in healthcare and better lifestyle choices, many more of us are making it all the way to triple digits. It’s great news, but are we ready for our 100-year lives

Latest figures show that more of us are now achieving the rank of centenarian. There were 15,120 people aged 100 or more living in England and Wales in 2022 according to the Office for National Statistics. That’s twice the amount in 2002, just 20 years ago.

The soaring number of people reaching 100 has attracted much attention by commentators exploring the social and economic impacts. In Lynda Gratton and Andrew Scott’s book “A 100-Year Life”, for instance, they describe the need for a fundamental shift in how we approach the three key stages in our lives: work, education and retirement. 

In response to rising life expectancies, the State Pension age is next rising in 2026 to 68 for anyone born after 6 April 1977, with further hikes to come. But how many of us will be able to keep up with the pace of work until 68 – or even into our 70s?

Clearly, we should all be planning ahead now to prepare ourselves for potentially 30+ years of retirement – including how we intend to get by for that amount of time without working. And with the increasing awareness of protecting our mental health, how can we keep ourselves busy and active enough to maintain a healthy mindset during such a long retirement?

Here are some ways that you can plan now for your future financially, socially and educationally.

Financially preparing for your 100-year life

If you’re planning for a 100-year life, having enough income to provide for yourself for potentially 30+ years is fundamental to living a comfortable retirement.

Of course, what constitutes a comfortable retirement differs from one person to the next. So how much should we be aiming to save? Latest data from the Pension and Lifetime Savings Association (PLSA) shed some light on the typical figures.

The PLSA estimates that a single person will need £14,400 a year to achieve a minimum living standard in retirement, or £22,400 for couples. For a moderate lifestyle, they say you’ll need £31,300 a year, or £43,100 for a couple. The figures jumps to £43,100 a year for a comfortable retirement for a single person, or £59,000 for a couple.

But don’t worry if you aren’t close to achieving those figures with your own pension savings. For many of us, the State Pension will form a large portion of our retirement income. In the tax year 2024/25, for example, the full new State Pension will be £11,500. For a couple, each with 35 years of National Insurance contributions, that’s an income of £23,000 a year. 

 Check your State Pension forecast to see how much you can expect in retirement.

Planning ahead if you are still in work

If you have saved into one or more workplace or personal pension funds, you’ll typically be able to access your money from age 55 (57 from 2028) to provide a retirement income for yourself. Here are some points to consider when planning ahead financially.

• Just because you can access your money from the age of 55 doesn’t mean you have to. If you leave your fund untouched until you really need the retirement income, you’ll give your investments more time to grow.
• Create a retirement budget to see all your projected monthly incomings and outgoings including your State Pension and any other retirement income you’ll have. Decide how much you’ll need for your groceries, clothes, travel and leisure activities etc. Doing the figures now will help you to see if you are on track to meet your saving goals and make plans if you are not.
• If you are still working, consider increasing the percentage of your salary that you contribute each month to your pension to give your fund an extra boost. 
• When you do come to access your defined contribution pension savings, you can choose between an annuity or a drawdown scheme to provide your retirement income. You can plan ahead by researching your options so you can make an informed decision when you reach retirement. 
• If your health allows, consider delaying your retirement, or phasing it so you move to part-time for a few years instead. Working and saving for a few extra years can make a real difference to your financial future. 

Boosting your income from age 55+

If you’ve crunched the numbers and your current or future retirement income isn’t quite hitting the mark, there are ways to boost your finances in later life. 

Not all of them will be suitable for you, so you can plan ahead now to explore which option might work best for you.

If you’ve more bedrooms than people in your home, then downsizing can be a good way to free up some property wealth in later life. For most people, our home is our biggest asset, yet it can also be our biggest drain of income! 

If downsizing your home could free you from burdening mortgage payments and reduce your council tax, energy and hefty repair bills, it might be worth a thought.

If you don’t want to downsize then there are borrowing options available for older homeowners. You could arrange a loan to fund one-off purchases such as a new car, or arrange a remortgage on your property. You could also look into a retirement interest-only mortgage (RIO).

Equity release is also an option for homeowners aged 55+ looking for a cash boost. This may allow you to free up the money you need from your home’s value, without having to make any mandatory monthly repayments on the loan. 

Typically, the interest can be left to roll up each month until you pass away or move into long-term care. At that point your plan ends, and the loan is repaid from the sale of your home. If you don’t want the loan to grow in size, there are interest-only plans available too.

Read more about how equity release fits into later life planning here.

If you’d like to explore your options for equity release, please call our friendly team on 0808 178 3055 or request a call back to arrange an appointment with one of our selected advisers. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

Health, social activities and later life learning

For many retirees, the transition from a structured work environment to retirement can be daunting. Suddenly, the everyday interactions and camaraderie of the workplace are no longer part of daily life. 

Loneliness is a real issue for many retirees as it can have a serious impact on our physical and mental health. According to Age UK, loneliness can be as harmful for our health as smoking 15 cigarettes a day. Making the effort to stay social will help you to forge new connections, enjoy quality time with your family and friends, and keep your body and mind active.

Here are some tips for building a robust social support network in retirement:

• Explore later life learning. Life is often viewed in three stages: education, work and retirement. But with 30+ years of leisure time to fill, why not enjoy revisiting education on your own terms? From evening classes to college courses and even degrees, there are so many opportunities for retirees to learn new skills and expand their knowledge. The University of the Third Age is a good starting point to find out more.
• Join a club, group or organisation. Now is a great time to embrace your hobbies and interests and meet some like-minded individuals. From arts and craft groups to sports clubs and the Women’s Institute (WI), check your local listings for meeting times and how to join. Don’t forget volunteering, too. For instance, if you enjoy walking, ask your local dog shelter if they need any extra dog walkers.
• Stay active in online communities. In today’s digital age, social connection doesn’t have to be limited to face-to-face interactions. Join online forums, social media groups, or virtual communities focused on topics of interest to connect with others from around the world. You could even try starting your own blog to document your journey through retirement!
• Stay connected with family and friends. Make an effort to maintain regular contact with family members and friends, whether through phone calls, video chats, or popping round for a coffee. Strengthening these bonds provides a sense of belonging and emotional support that many of us come to rely on a lot more as we grow older.
• Focus more on health and wellness. Make time for regular exercise and try to maintain a balanced diet, both are key to enjoying a longer, healthier life. Your mental health is as important as your physical health, so try to build an activity such as meditation, yoga or a half hour walk in the fresh air into your daily routine.

Of course, responding to the challenges and opportunities of increasing longevity doesn’t just fall on the shoulders of individuals. Governments and the private sector alike will also need to respond. They must continually reassess their role in helping people enjoy a  fulfilling and meaningful journey throughout their extended lifespan.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn