Finance: The new lifetime

'The retirement most of us are hoping for is slipping out of reach'

'The retirement most of us are hoping for is slipping out of reach' - Credit: Archant

Today’s retirees are likely to live 30 years longer than their grandparents – a whole second adult lifetime. A longer life to look forward to requires a significantly larger pot of money to fund it. Mike Williams, director and independent financial adviser at Chamberlain Stean and West, looks at why a fulfilling retirement is worth planning for

Since last month, people aged over 55 are able to take as much as they want from their private pensions. The chance to spend your pension pot how and when you want is something to look forward to, but there are pitfalls to having this new freedom. Before you give in to temptation, spare a thought to what lies ahead.

Older age doesn’t mean you’re consigned to pottering around the garden any more. For many, retirement is the chance to ‘get out there’ and make the most of their ‘golden years’. However, the retirement most of us are hoping for is slipping out of reach, as the pensions we saved so hard for become squeezed.

Feeling the squeeze

With growing life expectancy, pensions need to work harder than ever before. Most UK women at the age of 65 are likely to live another 29 years, while the average life expectancy of a UK man is 86.5 years, and more than a fifth will see their 95th birthday.

Then there’s what we would like to achieve in retirement. That luxury holiday you’ve always promised yourself, new hobbies, time with the family. All things considered, there’s plenty of time and opportunity to spend your hard-earned money. Throw inflation into the mix and you’re faced with a significant challenge to provide the income you need which also retains its spending power over time. Something which costs £100 today is likely to cost £163 in 10 years’ time (based on inflation at five per cent a year).

The question is, do the new pension freedoms give us control of our money or are they making us vulnerable to snap decisions and our propensity to underestimate our own life expectancy? It’s more important than ever that we take control of our futures; to have a greater chance of experiencing the retirement we envision. Pension wealth check

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Taking time to understand all the financial demands of retirement is essential. Do you know how many pensions you have or where they are?

Do you know how much your pension is worth? How about the type of funds they’re invested in or how much risk is involved? If the answer to any of these questions is ‘no’, now is the time to take stock and plan to review your pension to make sure it’s on track to support you in retirement.

If there’s one thing you can’t afford to do it’s wait. For most, advice from a professional financial planner is often the best route. A robust financial plan will allow for a fulfilling retirement, safe in the knowledge that the ‘what if’ scenarios have been addressed.

A free guide to pension changes can be downloaded at


Chamberlain Stean & West are appointed representatives of Financial Ltd, which is authorised and regulated by the Financial Conduct Authority, FCA No 466922.

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