How long will my pension last?

Planning for retirement can be one of the most rewarding and reassuring steps you take for your financial future. One of the most common and important questions people ask when approaching retirement is: how long will my pension last? This question does not have a simple answer. It depends on a wide range of personal circumstances, financial goals, spending habits and, of course, how long you live. That is why it is essential to consider your unique situation carefully, and for many, professional financial advice can make a significant difference in ensuring peace of mind.

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How long will my pension pot last?

The longevity of your pension pot depends on a number of factors. The total value of your pension savings at retirement is only part of the equation. What also matters is how much you withdraw each year, whether your pension remains invested, the performance of those investments, and how inflation affects your spending power over time. Charges on your pension should also be considered as these will reduce the potential growth on your pension pot.

If, for example, you retire with a defined contribution pension, you have flexibility over how much to take and when. You may choose to draw a regular income, take lump sums, or buy an annuity. However, with flexibility comes responsibility. Withdrawing too much too soon, or not accounting for inflation, could mean your pot runs out earlier than planned. On the other hand, if you draw less than you need out of fear, you may find you are unnecessarily limiting your lifestyle.

This is where detailed financial forecasting becomes critical. Understanding how long your pension pot might realistically last under different scenarios requires a clear view of your spending needs and how those might change throughout retirement.

There is of course the option to secure a guaranteed income for life from a flexible defined contribution pot (an annuity), in which case this income would be paid for the rest of your life. The amount of income secured would be based on your age, health, value of the pension pot being exchanged and prevailing interest rates.

What is your life expectancy?  

A fundamental part of estimating how long your pension needs to last is understanding life expectancy. According to the Office for National Statistics, the average life expectancy in the UK is currently around 79 years for men and 83 years for women. However, it is important to remember that these are averages. Many people may live well beyond these ages, particularly if they reach retirement age in good health.

This uncertainty highlights the importance of planning for a potentially long retirement.  At The Private Office, cash flow planning plays a vital role. It is a method of mapping out your income and expenditure over time, using realistic assumptions about investment returns, inflation, and life expectancy. This modelling can help identify if your current pension savings are likely to be sufficient, and what adjustments may be needed to stay on track.

Factoring in a longer life expectancy than the average can be a prudent approach. After all, running out of money in later life can be one of the most significant risks to your financial security.

How much retirement income do you need?

Understanding how much you are likely to spend in retirement is another key consideration. The Retirement Living Standards, developed by the Pensions and Lifetime Savings Association (PLSA), offer a useful benchmark to help individuals gauge how much income they might need.

According to the latest figures, a single person needs around £14,400 a year for a ‘minimum’ standard of living in retirement. This covers all essentials, including food, utilities and some social activities.  

For a ‘moderate’ lifestyle, the figure rises to £31,300. This allows for more frequent meals out, holidays in Europe, and increased financial security.  

A ‘comfortable’ retirement requires around £43,100 a year, enabling more luxuries such as long-haul travel and regular leisure activities.

These figures help to put your own retirement aspirations into context. If you hope for a lifestyle closer to the moderate or comfortable standards, you will need to ensure your pension arrangements are sufficient to support that level of spending.

How long would a comfortable retirement income last?

Let us consider how long a pension pot might support a comfortable level of retirement income, as defined by the PLSA mentioned above. For a single person aiming to draw £43,100 a year, a pension pot of £500,000 may appear substantial. However, depending on how it is invested, the rate of withdrawal, and future inflation, it could run out in less than 15 years if withdrawals are not managed carefully.

If that same pension pot remains invested and generates returns over time, it may last longer. However, the likelihood is you’d need at least £800,000 or more to cover a comfortable retirement. To do this on a smaller pension pot you would need to introduce a greater level of investment risk, which would need to align to your appetite for risk and be suitably managed in retirement. Moreover, drawing from your pension during a period of poor market performance (known as sequence risk) can have a lasting negative impact on the sustainability of your income.

This illustrates why it is not just the size of your pension pot that matters, but how you draw income from it and how you manage risk. Professional advice can be invaluable in helping you model different scenarios, avoid common pitfalls, and make informed decisions.

The role of the state pension and other income

It is worth noting that your pension savings are unlikely to be your only source of income in retirement. For most people, the State Pension will provide a foundation. As of 2025, the full new State Pension pays just over £11900 per year. While this goes some way towards covering basic living costs, it is unlikely to support a moderate or comfortable retirement on its own. The state pension does however reduce the income requirement from your private pension provision, and in turn the level of pot you will require at outset.  It’s always worth noting that the age at which you can access the state pension is rising from 66 to 67 next year and gradually increasing to 68 between 2044 and 2046.

Other income sources such as workplace pensions, rental income, investments or part-time work can also play a part. When considered together, these income streams form a broader retirement income picture. Taking the time to understand how all these elements interact can help you build a more resilient retirement plan.

The value of planning ahead

Whether retirement is just around the corner or still a few years away, taking the time to plan ahead can provide you with confidence and financial security. Identifying your likely income needs and considering different income strategies can all help you feel more in control of your financial future.

Of course, these decisions are not always straightforward. Tax implications, investment risk, inflation and changing personal circumstances can all influence the outcome. This is why many people benefit from seeking professional financial advice. An experienced adviser can help you make informed choices, build a personalised retirement plan, and adjust it over time as life changes.

Ultimately, the question of how long your pension will last is not just about numbers. It is about your lifestyle, your goals, your peace of mind. With the right planning, and the right support, you can look to the future with greater confidence, knowing your retirement income is designed to last as long as you need it to.

If you’d like to learn more about how we can help you with the retirement you want, why not get in touch for a free initial consultation. 

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This article is for information only and does not constitute individual advice. The information provided in this article is based on the current allowances and legislation and is subject to change.

The Financial Conduct Authority (FCA) does not regulate cash flow planning or tax advice.

A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can down as well as up which would have an impact on the level of pension benefits available.  

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change. You should seek advice to understand your options at retirement.