How to avoid outliving your pension pot

In News by craig

Avoid outliving your pension pot

Could you run out of money in retirement? Helpful tips to avoid ‘pension poverty’.

8TH JULY 2018

After working and saving for upwards of four decades, most look towards a happy, healthy retirement. For many, it is a time to fulfil lifelong aspirations, travel further afield, or provide financial security to their families.

Pensions help achieve these ambitions – but the risk of outliving your retirement fund is greater than ever.

A recent study by the PPI (Pensions Policy Institute) found that over a quarter of retirees could well run out of money in their later years.

According to the PPI, uncertainty around longevity is a contributing factor. At the turn of the millennium, the average life expectancy was 77 years of age. Fast forward to the present, and that figure has leapt up to 81 – and looks set to continue rising.

This, combined with a lack of astute pension planning, could see retirees exhausting their pension pots up to fifteen years before passing away, creating unnecessary financial stress and concern in their final years.

Independent advice is crucial when determining just how much money you need put aside for the length of your retirement, says Wealth of Advice’s Chris Breward.

“Pension freedoms have opened up so many new avenues to retirees, but with these freedoms come a number of risks. Retirement planning helps you assess how long you expect to live, and how much you provision accordingly.”

Our top tips

Contribute more to your pension

It goes without saying that if you contribute more to your pension, you can reap the rewards later in life. At present, you get a level of pension tax relief based on your income band (basic, higher or additional rate), which effectively means you can get 20% worth of pension top-ups from the government.

Determine the best way to take your pension

Work out what method of drawing your pension works best for your personal situation. You could opt for a drawdown scheme, taking part of your pot and leaving the rest to grow but with certain tax implications, or purchase an annuity, guaranteeing a set income per year.

Budget accordingly

Determine just what you want – and what you need – from your pension pot. Factor in all of your essential outgoings and break down exactly what you need in order to maintain or achieve your desired lifestyle.

Take financial advice

Decisions around pension planning and retirement saving can be daunting for those not in the know. Talk to one of our friendly independent financial advisers, and we can help you come up with a retirement plan personally tailored to you.


Our financial guides cover a range of areas, including the benefits of using an IFA, blended retirement solutions, guidance on the new pension freedoms and how to invest in a low interest environment.

You can download our comprehensive guides directly from our website completely free of charge. To get your complimentary copy, follow the link below, or get in touch with us to request a printed version, sent directly to your mailbox.