You are here: Home - Retirement - Retirement planning - News -

This is how alcohol affects your pension income

0
Written by: YourMoney.com
01/05/2018
Nearly 30 million Brits are estimated to drink weekly and while the effects on your waistline and savings are evident, boozers could actually see a boost to their pension income.

We’re not suggesting you binge drink for a quick fix on your retirement income. But to tie in with ONS data relating to the drinking habits of the nation, Hargreaves Lansdown has crunched some numbers to see how alcohol consumption may impact pension pay outs.

The ONS data revealed those aged 45-64 are least likely to be teetotal. Two thirds of those approaching retirement – and who live with someone else – drank in the last week while 57% of those living alone also enjoyed a glass or two.

However, less than half of those aged 16-24 drank in the last week, irrespective of whether they lived alone or with someone else.

What boozing means for your pension

Hargreaves Lansdown calculated that a 65-year-old drinking 24 pints of beer a week would see their £100,000 pension pot buy an annuity of £5,750 a year. This is an extra £279 a year, jumping from £5,471.

But with a pint costing an average of £3.60, the annuity increase would only allow you to keep raising a glass for just over three weeks.

More modest drinkers – those splurging on three bottles of wine a week ­ – would see pension income increase by £96 a year.

Hargreaves Lansdown said that health conditions which can be linked to alcohol consumption can ensure even higher pension incomes.

Someone aged 65 with a £100,000 pension who quaffs three bottles of wine a week might receive £5,567 per year, but the combination of high blood pressure, high cholesterol and being overweight can boost the pay out to £5,912.

The graph below shows the impact of drinking on the income from a single life, non-increasing annuity for a 65-year-old with a £100,000 pension:

Alcoholpension

Nathan Long, senior pension analyst at Hargreaves Lansdown, said: “While older members of society may not cheer their hangovers worsening with age, they may raise a glass to the fact their boozy habits could give them a higher retirement income.

“Annuities are a way of turning your pension into a guaranteed income for life, and providers actually give you a higher income based on certain health and lifestyle conditions, which includes drinking. Even small levels of drinking boosts pension pay outs, so it pays to disclose all of your health information as ultimately they are not expecting you to live quite as long. Use an annuity broker to help you select the provider that will maximise your income.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • @YourMoneyUK All you need to know about the latest Current Account Switching winners and losers - hats off to Starl… https://t.co/fAyHhplpoP
  • RT @WeareJust_PR: Many people struggling to make ends meet may not realise they are entitled to financial help or find the system too confu…
  • RT @WeareJust_PR: Many people struggling to make ends meet may not realise they are entitled to financial help or find the system too confu…

Read previous post:
immigration checks
Buy-to-let mortgage choice hits record high

The number of buy-to-let mortgages on the market has hit its highest ever level, as lenders compete for landlord borrowers,...

Close