Not that long ago, retirement was a fairly fixed concept: after a lifetime of employment, at some point in your sixties you would say goodbye to colleagues for the final time and depart to spend more time in the garden, on the golf course or with your family.

And while elements of this traditional image still ring true, the edges have become a lot more blurred. The combination of an ageing demographic and the increased cost of living are leading many to rethink the idea of retirement as they approach their later years.

A key issue is the growing disconnect between life expectancy and the age at which people expect to retire, which means a growing number of people are having to financially support themselves for longer in retirement than they might have expected.

Living longer lives

What became the basic State Pension was first introduced in 1948. At that time, it was available to men at the age of 65 when the average male life expectancy was around the same figure. It was available to women at the age of 60 when female average life expectancy was around 70.

Fast forward to the 21st century and, while the State Pension age has been marginally adjusted upwards to 66 for both sexes, the latest available data shows that the average life expectancy has risen significantly to almost 79 years for males and 83 for females. By 2047, projections suggest this will grow to 89.3 and 92.2 respectively thanks to advances in health treatments, by which time the State Pension age is legislated to have increased to 68.

Other statistics that illuminate our ageing population include the fact that the number of people aged 100 or over in the UK has doubled in the past 20 years and the number of pensioners is expected to reach 13.7 million in 2032.

State pension support

Our improving prospects of living a longer life is undoubtedly cause for celebration. But it also has important financial implications if we want our final decades to be full and happy, and not to feel that we have the burden of money worries hanging over us.

For many, some of this pressure is likely to be alleviated by the availability of the State Pension, with an individual typically needing 35 years of qualifying National Insurance contributions to qualify. This is currently protected by the so-called triple lock, which guarantees it will increase each year by either the rate of inflation, wage earnings growth or 2.5% – whichever is the higher.

For example, in April 2025 the State Pension increased by 4.1% as a result of the link to earnings growth. This took payments to £230.25 a week for the full flat-rate State Pension and to £176.45 a week for the full basic State Pension.

While Chancellor Rachel Reeves has committed to the triple lock until the end of the current parliament, the increasing cost of the State Pension has led some to question its sustainability. There have also been suggestions that the State Pension age should increase further in light of the growing ratio of pensioners to workers, with the International Longevity Centre stating that it might need rise to 70 or above as early as 2040.

Personal retirement planning

These factors bring the importance of private pensions and personal savings into sharp focus. And while auto-enrolment has ensured millions more are contributing to a pot of funds for later life, there remain concerns over how well individuals understand how much they are likely to need and, therefore, how much they should be investing.

Leaders in the financial services sector have sounded this warning, highlighting that a comfortable and financially secure retirement from the age of 65 is becoming an ever-harder proposition for many.

Ultimately, the responsibility for pension-saving decisions rests with an individual employee, but employers can play a vital supporting role for those facing this challenge. For example, there is potential to enhance financial literacy though education initiatives, helping close any knowledge gaps – an approach that might be particularly appreciated by younger members of staff.

Supporting staff with saving

Companies can also facilitate access to professional advice from trusted experts. This can open employees’ eyes to the broader array of savings vehicles available, helping give them a more holistic view of their finances, set appropriate goals, and pursue other savings and investment opportunities to complement their pension.

Crucially, it is about putting in place a plan that realistically reflects what the future might hold. With many people facing more years in retirement, traditional models might no longer be fit for purpose. But with the right support, staff can establish financial plans that put them on the path to a long and happy life in retirement.

The information contained within this communication does not constitute financial advice and is provided for general information purposes only. No warranty, whether express or implied is given in relation to such information. Vintage Corporate or any of its associated representatives shall not be liable for any technical, editorial, typographical or other errors or omissions within the content of this communication.