Someone who qualifies for the full State Pension and expects a total annual income of £15,800 will need an estimated pension pot of around £121,000 to fund a 20-year retirement through the state pension and income drawdown, according to Prudential.

With 20 years the average a ‘significant’ number of retirees may live for many years longer, Prudential said. For example in Harrow, one of the UK’s longest lived areas, life expectancy at age 65 is 22.3 years. 

Prudential calculated that someone who qualifies for the full State Pension and expects a total annual income of £15,800 will need an estimated pension pot of around £139,000 to fund a 25-year retirement.

Vince Smith-Hughes, retirement expert at Prudential, said: “The changes to pensions, savings and the rules around taking a retirement income that were announced in the Budget in March are good news for savers and retirees because they now have more choice. However, these new figures underline the importance of making retirement income decisions that address the risk of outliving your savings. If retirees choose to draw income directly from their pension fund, they need to consider if it’s sustainable to take that level of income over an extended number of years.

“It is also important for people not to overestimate the value of the State Pension as a fall back should they exhaust their retirement pot. The State Pension alone is well below the income level most people estimate they’ll need for a comfortable retirement.”