Living to age 100: How to make your UK pension last longer

Prepare to live to 90, 100 or beyond

The number of people hitting the 100-year milestone has reached a record high. There were an estimated 12,500 women aged 100 or over in England and Wales last year, and an estimated 2,830 men, according to the ONS. The amount of people in their 90s has also surged. Almost half a million (548,280) people are now in the 90-99 age bracket. About two-thirds of nonagenarians are female.

The first thing to do to prepare for a potentially long retirement is to work out what sort of income or nest egg you’ll have when you stop work. If you have been making National Insurance contributions over the years, you can also get a UK state pension forecast on gov.uk. 

Boosting your UK state pension now will put you in a stronger position for when you do retire and you’re trying to manage your money.

How the number of nonagenarians and centenarians has surged over the past two decades

Source: Mid-year population estimates of the very old, England and Wales, ONS

Consider when you’d like to retire

The next thing to think about is when to retire. If you enjoy working and/or you’d like a few more years to build up a bigger nest egg, it could make sense to push your retirement date back. 

Alternatively, you could “phase” your retirement by switching to part-time work and reducing your hours gradually. This means you can keep earning, continue funding your retirement pot, and have time for other things, like hobbies and spending time with family.

How to access your UK pensions in retirement

So, now you’ve retired, you’ll need to consider how to draw money from your UK pensions. Claire Trott, head of advice at Technical Connection, comments: “We can spend a third of our lives, if not more, in retirement, so our pensions can easily dwindle away if not taken care of, especially if you take out too much too soon.

To ensure your pension pot lasts as long as you do, one option is to buy an annuity. This pays out a guaranteed income for life in exchange for your pension pot. However, this is an irreversible decision, and it means there is no money left to provide an inheritance for loved ones.

For British expats, buying an annuity may not always be straightforward while living overseas, as many UK providers limit availability to non-residents. Many, therefore, wait until they return to the UK to consider this option.

Some people like to mix income drawdown (where you keep the pension invested and withdraw money whenever you like) with annuities. For example, you could buy an annuity with one pension pot to cover basic living costs, and have another one in drawdown where you use the cash to fund “extras” like holidays or a new kitchen. Alternatively, you could use a drawdown at the start of retirement, and buy an annuity later, at, say, age 80, if you’d prefer some regular, guaranteed income. 

You should also review your UK National Insurance record. If you’re living abroad, you may have gaps in your contributions, which could reduce your State Pension entitlement. In many cases, expats can make voluntary contributions, typically Class 2 or Class 3 NICs, going back up to six years. Filling these gaps can potentially be a cost-effective way to maximise your State Pension, providing an additional layer of guaranteed income alongside your private pensions.

“Being as tax-efficient as possible is one of the best ways to make your money last”

Trott highlights the need to think carefully about tax. Most savers can take 25% of their UK pension pots tax-free. “One thing to consider is if you need to access all of your tax-free cash, which can be very tempting, but once outside of the pension it is much easier to spend,” she says.

If the pension scheme allows, rather than taking the tax-free cash as a lump sum, you could opt to have a quarter of each withdrawal tax-free while the remaining 75% is taxable. Alternatively, you could use the lump sum to buy a ‘purchased life annuity’ when you have returned to the UK, which provides a guaranteed income, but you are only taxed on part of the income received. This can be useful if you don’t need the full lump sum immediately and you’re happy to swap it for a regular, tax-efficient income either for a fixed term or for the rest of your life.

“Being as tax-efficient as possible is one of the best ways to make your money last as long as possible, so taking holistic advice across all your assets can mean a significant amount of tax-free income each year,” notes Trott.

How to create your ultimate retirement masterplan

It’s exciting to think about finishing work and enjoying a nice, long retirement. A financial adviser can help you maximise your savings and create a tax-efficient plan that can support you for potentially 30 or 40 years of retirement. This includes providing an inheritance for loved ones and planning for care costs as well as budgeting for the fun stuff like holidays and hobbies. 

This article is a general communication that is provided for informational purposes only. It should not be relied upon as financial advice, and it does not constitute a recommendation, an offer or solicitation. No responsibility can be accepted for any loss arising from action taken or refrained from based on this publication. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances. You are advised to seek independent tax advice from suitably qualified professionals before making any decision as to the tax implications of any investment.

Source
¹Gov.UK - 3 September 2025