Having a bigger pension pot means you'll live longer
New research finds that the more you have in your pension pot, the longer you’ll live.
Pension provider Equiniti has found the secret to longevity: a big pension pot.
Its research found that someone with a company pension of between £25,000 and £30,000 was statistically likely to live almost one and a half years longer than someone with a pension between £10,000 and £15,000.
Equiniti looked at the financial positions of more than 600,000 deceased pensioners, and came up with the table below.
|
Annual pension at death |
Average age at death |
|
£10,000-£15,000 |
78.80 |
|
£15,000-£20,000 |
79.62 |
|
£20,000-£25,000 |
79.76 |
|
£25,000-£30,000 |
80.21 |
The study was only based on pensions paid by Equiniti, which acknowledged that some of the pensioners may have other pension schemes. However, it argued there was enough evidence to suggest that people who had a larger pension pot tended to live a longer life.
Mark Webster, business development director at Equiniti Pension Solutions, said: "The link between wealth and longevity is well known. However, this analysis shows that income in retirement also has a part to play. While there is obviously a direct correlation between retirement income and lifetime earnings it is also reasonable to conclude that having a higher pension will for many increase their longevity.”
Take control of your pension saving with a SIPP
Ways to boost your retirement income
So if you want to improve your pension pot, and perhaps benefit from a longer life, what can you do?
Save early
Putting money into a pension from an early age, even if it's only relatively small amounts, can make a huge difference to the final size of your pension pot as a result of compound interest. Essentially the money you save early on works harder than the money you save in your final years before retirement, as it has more time to grow. Read Why the first pounds you save work the hardest for more.
Take control of your pension saving with a SIPP
Save more
Can you afford to save a little more each month into your pension? Just a few extra pounds can make a difference. And don't forget that thanks to workplace pensions, your contributions will be bumped up by your employer and the Government. Some employers already offer workplace pensions, while others still have a couple of years to go before they are mandatory for them, depending on how many employees they have.
For more, read Workplace pensions: what it means for you.
Monitor performance
It's not enough to stick a few quid away each month and then hope it will have grown a lot by the time you come to retire. You need to keep track of how your pension investments are performing. And if they aren't up to scratch, don't be afraid to switch.
What fees are you paying?
Linked to this, you need to keep on top of what fees you are paying for your pension. There's no point enjoying healthy returns from your investments if most of those profits are being eaten up by excessive charges. Again, if you think you are paying too much, don't be scared to shop around for a new deal.
Continue working
If you don’t want to stop working when you hit state pension age, you don’t have to! The biggest benefit here is delaying your pension while earning more money. You could even move to part-time work to spend more time with your family or on your hobbies.
Take control of your pension saving with a SIPP
More on pensions:
Pension tracing service to triple in size
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