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There's no knowing exactly how long your retirement will last, making it hard to plan your finances.
New statistics show that more people are living to the age of 100, yet the state pension age – when many people decide to retire – is currently 66.
This could mean you'll need to live off your pension savings for several decades.
As the average retirement period increases, so too does the risk of running out of money later in life.
Here, we explain how you can make your retirement savings go the distance.
New figures from the Office for National Statistics (ONS) show that in the middle of 2025, there were 15,172 people who were at least 100 years old. This number has doubled in the past 20 years.
There were also an estimated 581,414 people aged 90 or over in England and Wales in 2025, which represents 54% more than in 2005.
The ONS data show that women make up two thirds (66%) of those over the age of 90 and 81% of those over the age of 100
With people stopping work at 65 (women) and 66 (men), on average, a 30 or 35-year retirement isn't uncommon today.
It's easy to underestimate how long you’ll live for and how long your retirement income needs to last.
Your chosen retirement product mix will help mitigate against your fund being drained too soon:
If you choose an annuity, you'll have an income for life, regardless of how long you live.
Once you’ve arranged an annuity, you can relax knowing that your monthly or annual income won't be subject to stock market fluctuations.
Taking the annuity route offers certainty, but it removes flexibility over how much income you can take. Index-linking an annuity will mean that payments rise in line with inflation.
If going solely for an annuity or annuities, you need to think about how you would cover the cost of one-offs, such as paying for work on your home as you get older or replacing your car. Plus, once you've bought an annuity, you can't reverse the decision.
Speak to HUB Financial Solutions to help you compare the options available across the whole market.
Find out moreIf you take out an annuity as a result of using the service from HUB Financial Solutions, Which? will earn a commission to help fund its not-for-profit mission.
Choosing pension drawdown might seem like the ‘casino’ option, but it can form an important part of your retirement portfolio if managed sensibly.
Pension drawdown involves keeping your pension invested, usually in a mixture of shares and bonds, and withdrawing it gradually.
It offers flexibility over how much you take from your pension and when you withdraw cash. Leaving the pot invested could mean it grows during your retirement.
As retirements get longer, however, it will be essential to ensure that the money doesn’t run dry if you make it into your 90s or beyond.
The Which? online pension drawdown calculator allows you to see whether the withdrawals you want to make are likely to be sustainable and will give you an idea if the money is likely to run out.
You don’t have to put all of your pension into an annuity or a drawdown plan.
Taking a mix-and-match approach by arranging an annuity (secure and guaranteed) alongside drawdown (flexible, with potential for growth) can give the best of both worlds.
For example, you might decide to start off with drawdown, then buy an annuity later in retirement with the remainder of your pot to ensure that you’ll have a core income to sustain you (alongside the state pension).
You'll generally find that the older you are when you arrange an annuity, the higher the annuity rate you'll get, reflecting the fact that the annuity provider won't have to pay out for as long.
Whether you’re unsure if you have enough to retire, or are already accessing your savings, our money guidance service can talk you through your options. Which? Money members get unlimited access to them via phone.
Find out moreThere are other factors you need to consider to ensure your pot is sustainable:
The impact of inflation can prove particularly pernicious for retirees, as it erodes the purchasing power of their savings and puts a strain on fixed incomes.
Most people retiring today have defined contribution schemes, where your retirement income depends on how much you’ve saved and how you decide to access your savings.
If you then opt for the guaranteed income of an annuity, you can choose between payments that remain fixed each year (level) or that increase over time (index-linked). With index-linked annuities, payments start off at a much lower level than with a level annuity.
If you do opt for pension drawdown, a variable withdrawal strategy should help keep your pot sustainable.
The idea is to determine how much you can afford to withdraw from your pension in any given year – weighing up factors such as the fund's performance, the portfolio's value and your remaining life expectancy.
Alternatively, you can adopt a more structured approach. The ‘4% rule’ has long been used to help people determine how much to take out.
Originally devised by American financial planner William Bengen in 1994, it suggests that to ensure your pot lasts over a 30-year retirement, you should withdraw 4% of your pension in the first year, then take the same amount each year, adjusted for inflation.
With a starting pot of £250,000, and assuming annual investment growth of 5% (after charges), you’d end up with £86,000 after 30 years by withdrawing 4% initially and increasing your withdrawal by 3% each year for inflation.
This strategy is inflexible and updated theory suggests it’s a little too conservative.
Around 8.5 million people over the state pension age pay income tax in the UK, with approximately one million pensioners now paying tax at 40% or above.
That number is set to rise further in the years ahead, as the freeze on income tax bands is set to last until April 2031.
You can take up to 25% of your pension as a tax-free lump sum (up to a maximum of £268,275 across all your pensions), but anything above that will be added to the rest of your income and taxed in the same way.
You’ll pay tax on income above your personal allowance of £12,570. The state pension is likely to use up most of this, as it’s worth £12,548 at its full level.
A large withdrawal from your pension in any given year can push you into a higher tax bracket, and you should manage withdrawals to stay below the upper bands.
If you live in England, Wales or Northern Ireland, higher-rate tax begins at £50,271, so you’ll pay 40% on income above that. In Scotland, you’ll pay the higher rate (42%) on income above £43,663.
Select the option that best describes your current situation.
