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Life expectancy

How long we may live will have a significant impact on our retirement.

Why is it important?

  1. By understanding how long we may live, we can plan better throughout retirement.
  2. The value - and therefore the potential benefits - of different income options may depend on how long we think we'll live.


Reading time

5 mins


What you need
An understanding of retirement options

Key themes at a glance

We can't be certain
We don't know exactly how long we're going to live, but having an overall understanding helps plan for retirement
Don't underestimate
Most people underestimate how long they'll live, which can mean they risk running out of money in later life
We are living longer
People are living longer than ever before, with more and more living into their 90s and 100s

How long will I live?

The Office of National Statistics (ONS) has a really helpful tool which provides information on life expectancy.

Try it for yourself

About life expectancy

Using the ONS' tool, here's an example for a 65-year-old woman:

life expectancy

As the chart above shows, it's not just about average life expectancy but how far beyond that we may live too.

For a 65-year-old woman the average life expectancy is currently 87 with a 25% possibility of living to 94.

A 65-year-old man has an average life expectancy of 85 but also has a 25% chance of living to 92.


What does it mean?

Let's look at drawdown.

If you're going to use drawdown to provide your retirement income you'll need to know how long it will last. 

So let's consider the example of a 65-year-old woman, as shown on the left. She has a £100,000 pension pot.

If her pension savings were projected to last to age 88, she might think that this would be more than enough.

However, as we've seen, she has a substantial chance of living well into her 90s, which would mean that if she used drawdown, running out of money in her late 80s would be a problem.

Let's now look at the same scenario but with an annuity.

Her £100,000 pot would provide an yearly income of £6,680 on a single life non-increasing basis, with no guarantees.

On this basis, it would take roughly 15 years for her to have been paid all of her money back and if she lives to 94 (which she has a 1 in 4 chance of doing) she would have been paid almost double.  

“Understanding your own life expectancy is vital to ensuring a good retirement.

Many people underestimate how long they'll live for, which means they risk running out of money in later life.”

Josh Gordon BA (Hons) FPFS
Head of Financial Planning

What should I do next?

Find out about retirement living standards

Use our quick tool to explore how your pension pot size and age affects the type of lifestyle you can afford in retirement. You don't have to provide any personal info.
Lifestyle explorer