Money Minder UK

The 'Age of Ruin' - How long will my pension last?

As we approach retirement, it’s crucial to start thinking about pension funds, and how long they are likely to last us.

Many people look forward to their retirement and the plans they have so much, that they tend to overlook the importance of this aspect, and can end up facing financial troubles in their later years.

As a result, and with the cost of living crisis exacerbating the problem, more individuals are likely to be worrying about their pension provision. Internet searches for topics such as “do private pensions run out?” have increased by a third in the last year, according to Google data.

But is your pension enough to fulfil your lifestyle when you hit retirement age?

In this report, we will also provide further advice on how to ensure that your pension pot lasts as long as possible.

How likely am I to run out of money before I retire?

Using the Money Minder pension drawdown calculator, we found that the average ‘Age of Ruin’ across the UK is 78. This is five years lower than the average life expectancy.

The ‘Age of Ruin’ establishes the age someone will reach before they are financially unable to live as comfortably as they would like in their retirement. This could be due to unforeseen costs and circumstances, or poor financial planning.

How did we come to this conclusion?

According to the Office of National Statistics, the average personal pension pot fund for those aged between 65 and 74 is £190,000.

The Retirement Living Standards from the Pensions and Lifetime Savings Association states that, for a moderate living standard, a single pensioner requires £23,300 a year of income. £10,600 of this would come from a full State Pension, leaving a shortfall of £12,700.

To ensure that you have enough to financially retire, Money Minder assumed that those that have £190,000 in their personal pension pot are likely to withdraw 25% tax-free cash at the outset, which leaves a residual fund value of £142,500.

We also took into account a gross taxable income of £14,846, to allow for an income tax rate of 20%, and assuming a personal tax allowance of £12,570.

Annuity rates were calculated based on buying a 10-year, guaranteed, RPI-increasing pension at 3.95%, using the pension drawdown calculator.

In order for retirees to be able to support an income of £12,700 per year, they would need a pot of £367,848 in order to live their life on a ‘moderate’ basis - this is calculated with the residual fund of £14,846 divided by 3.95%, multiplied by 100.

If your total fund value is £190,000 after your 25% tax free cash is taken, and assuming you spend this on a big holiday or car, your residual fund of £142,500 drawing out at £14,846 per year gross would last up to age 78, nearly 79.

This is seven years less than the current life expectancy for those aged 65 and over across the UK, which is on average 85-years-old.  Life expectancy at 65 years in the UK is another 18.5 years for males and 21 years for females. 

And even if your pension grew at 8% per annum, the fund could be exhausted by the age of 83.

It’s important to note that these calculations are based on current annuity rates and can fluctuate over time. Therefore, make sure that you review your pension plan regularly and adjust it as necessary to ensure that it remains sufficient for your needs.

Consider a pension drawdown calculator to understand your personal retirement situation and see how your pension fund could provide you with an income during retirement: 

How does this impact the UK regionally?  

According to the ONS, the average life expectancy across the UK for people at 65 is 85 years old. This means that currently, people may be on the trajectory to run out of money seven years earlier than necessary.

The picture differs across the UK, where life expectancy varies. Life expectancy continues to rise, and the prospect of a long and comfortable retirement remains a priority.

How much shortfall in years do some residents have, if their pension provision is at £190,000?


Life expectancy after 65

Years left in shortfall after ‘Age of Ruin’ at 77







St Albans



























Brighton and Hove



Milton Keynes






















Seeing these numbers could bring great anxiety to those who are nearing retirement, as well as for younger generations who are acutely aware of the challenges that they may face as they age. Some individuals may find themselves in a position where they do not have sufficient savings to maintain their desired standard of living in retirement. Ultimately, the ‘Age of Ruin’ can have profound long-term implications for individuals, their families and society as a whole.

How do I avoid running out of my pension early?

There are several factors that can impact how long your pension is likely to last. If you choose to withdraw more than the recommended amount each year, your fund may be depleted much faster. Similarly, if you have other sources of income or savings, you may be able to stretch your pension further.

Another important factor to consider is your lifestyle and expenses. If you plan to travel extensively, take up an expensive hobby, or if you are faced with unexpected care costs, your pension may not last as long as you would like. It’s crucial, therefore, that you factor in emergency spending and expenses when planning.

Do I need to consider pension drawdown?

Pension drawdown is a popular option for people who want to take control of their retirement income and make their pension last longer and grow with time.

With pension drawdown, you can withdraw a portion of your pension savings as and when you need it, rather than taking a fixed income for life. 

It’s also very flexible. Unlike a traditional annuity, where you exchange your pension savings for a guaranteed income for life - which may not be enough to sustain your desired lifestyle, flexible access drawdown, if the investment strategy is done right, could see your income rise in later years.

Another advantage of pension drawdown is the potential for higher investment returns. With an annuity, you’re typically locked into a fixed income rate, which may not keep up with inflation or the performance of financial markets.

Another advantage of pension drawdown is the potential for higher investment returns. With an annuity, you’re typically going to be locked into a fixed income rate, which may not keep up with inflation or the performance of financial markets. With pension drawdown, you can invest your pension savings in a range of assets, such as stocks, bonds and funds, potentially increasing your pot over the longer term.

It’s important to note that it can come with higher risks than an annuity, as the value of your investment can fluctuate over time.

Pension drawdown can also help you to provide for your loved ones after you pass away. By taking a flexible income from your pension, you can ensure that you stay within your personal tax allowance and avoid paying higher rates of tax on your withdrawals. You can also choose when to take your income, so you can delay taking withdrawals until you’re in a lower tax bracket or want to use your personal allowance for another purpose.  

To understand the difference between an annuity and pension drawdown, read our article: Annuity vs Drawdown.



To reveal how much money is needed before reaching the average ‘Age of Ruin’, Money Minder looked at the average pension pot fund for those aged between 65 and 74 - £190,000.

It then used the figure from the Pensions and Lifetime Savings Association, which estimates that a single pensioner requires £23,300 a year of income to maintain a moderate living standard, and based the gross income on £14,846, allowing for £2,146 income tax at 20% and assuming a personal tax allowance of £12,570.

Assuming a £190,000 pension with 25% tax free cash taken at outset, this leaves a residual pension fund of £142,500 - 75% of the pension fund. Using the Money Minder’s pension drawdown calculator, with a 10-year, RPI-increasing pension at 3.95%, it established the average ‘Age of Ruin’ in the UK.


Please be aware these articles are for general information purposes only and correct at time of printing. We will not accept responsibility for any errors made or actions taken by any readers that have acted on the information contained. Answers given are for guidance only and specific advice should be taken before acting on any of the suggestions made. All information is based on our understanding of current tax practices, which are subject to change. Always remember when investing, past performance is not necessarily a guide to future performance and the value of some investment units can fall as well as rise.