Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you

IF you want evidence that we’re all living - and working - for longer you need look no further than the Queen, who celebrates 70 years on the throne this week.

Aged 96 she is, by some distance, the longest lived of any British Monarch and her seven decades in the top job makes her the longest reigning too.

What chance do the rest of us have of reaching milestones like that?

You might not be surprised to hear that Her Majesty has already surpassed the average UK life expectancy, which is 82.9 years for women and 79 years for men. Those are the life expectancies at birth - if you are older than that you can expect to live longer.

For example, men already aged 65 will live on average until age 85, while women aged 65 will live until 87 on average. Men aged 65 would have a one in 10 chance of reaching the Queen’s current age of 96, while women that age have a one in 10 chance of reaching 98.

Those numbers come from the Office for National Statistics, which has also predicted that life expectancy will continue to grow - notwithstanding recent short-term dips in the numbers. Baby boys born in the UK in 2020 can expect to live on average to age 87.3 years and girls to age 90.2 years, according to the ONS, taking into account projected changes in mortality patterns over their lifetime.

All this has implications for our finances because all those extra years of life have to be paid for, both by the government in the form of state pensions, welfare and health spending, but also by individuals who will have to support themselves for longer in retirement.

Making preparations in advance will be key, and the earlier the better. Doing what you can to maximise your pension savings will help you meet the challenge. Typically, you are allowed to pay in £40,000 a year to a pension, with a lifetime allowance of £1,073,100.

Reaching that level is daunting but pension tax relief means that contributions are helped by money that would otherwise have gone to the tax man. An amount equivalent to any basic-rate tax paid is automatic, while the extra benefit available to higher and additional rate payers is gained through the tax system.

For example, a higher-rate tax payer paying £80 of their take-home pay into a pension sees this rise to £100 automatically. Even more can then be claimed back - automatically or via self-assessment, depending on the scheme - so that the cost to them falls to just £60.

Contributions are allowed to build tax-free and then 25% of the pot can be taken, normally once you reach aged 55, with no tax due and income tax payable on the rest.

The biggest relative benefit comes for those whose income in retirement puts them in a lower tax band than was the case during their working life and, because the system is linked to the income tax you pay, it is more generous overall to higher earners.

More on saving for retirement

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not normally be possible until you reach age 55 (This way to change to 57 in 2028). This information is not a personal recommendation for any particular investment or course of action. If you are unsure of the right approach for you personally, you should speak to an authorised financial adviser.

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