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How long does your pension have to last?


How long does your pension have to last?

Pension flexibility means not having to buy an annuity, but how long will your pension fund have to last?

The Office for National Statistics (ONS) website has a calculator that estimates how long your pension will need to last (

For example, the calculator says that for someone who is 50 years-old now, life expectancy is 86 years for a man and 89 years for a woman, but there is a 25% chance of the man living until age 95, the woman to age 98, and 12.3% chance of the man living to 100, 18.9 % for the woman.

Viewed another way, there is a one in four chance that a 50 year-old man’s  pension fund will have to last for at least 28 years rather than his life expectancy-based 19 years. It is at this stage you may be wondering why nobody has invented a simple investment that is designed to last as long as you do, however long that is. In fact, the product does exist – an annuity.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

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