Get ready to LIVE TO

It’s not just our minds and bodies that need to be prepped, it’s our bank balances too, says Faith Archer

- Faith Archer

With the number of centenarians in the UK expected to more than triple over the next 25 years, now's the time to prepare financially for living longer. Increasing longevity calls for a mindset shift. Rather than planning to fund a couple of decades beyond state pension age, you could be looking at 30 or 40-plus years – especially if you tap into work or private pensions before you reach state pension age.

More than a third of us are concerned about running out of money if we live to 100, according to research by Canada Life. It also found that many people are underprepared: 43% of those aged 35 to 54 have less than £10,000 in savings. If turning 50 only marks the middle of your life, will you have to work for decades more or can you fund a much longer retirement?

Now that far fewer people have defined benefit pensions or use annuities, both of which typically pay a guaranteed income for the rest of your life, there is a real risk of running out of money. But by taking control of how much you save, how long you work and how you stretch your money afterwards, you can look forward to your financial future, rather than feeling fearful.

RETHINK RETIREMENT

PHASE IN YOUR RETIREMENT

Rather than a hard stop, consider gradually winding down work.

'If you receive an income from work, this may also mean you're able to use less of your pension savings, letting compound interest do its work for longer,' says Nick Flynn, retirement income director at Canada Life.

Going part-time or switching to a less stressful job, even if it's lower paid, could help you avoid taking too much, too soon from your pension pot.

CONSIDER FUTURE CONTRIBUTIONS