Britain is growing older. If you need any evidence of how the UK population is ageing, you don’t need to look much further than the latest numbers from the Office for National Statistics (ONS) .

Last year there were more than half a million people aged 90 and over living in the UK – included in this number were 14,450 centenarians. The number of people living to 105 or older stood at 780, double the figure of a decade earlier.

Bottom line: you are probably going to live for much longer than you think. Whether you will be in good enough health to carry on working is another question altogether. While life expectancy is increasing, healthy or disability-free life expectancy for both men and women has not nearly kept pace. You may still want to work but if you’re not able to your pension savings will need to do the heavy lifting. So how do you get more from your pot?

Here are three retirement strategies to eke out a bigger income from your pension savings:

1. Top up your state pension

Recent good news is that retirees, specifically men over the age of 65 and women over the age of 63, have been offered the chance to top up their state pension to a maximum of £1,300 a year or £25 extra a week, in return for a one-off payment.

How much you will have to pay for this income boost will depend on your exact age – the older you get, the lower the cost – good news for all those centenarians.

The offer is open to anyone who will reach state pension age before April next year. After that date, the new single-tier state pension will kick in.

The Institute of Fiscal Studies has calculated that it would cost double what the government is asking for to fund an extra £1,300 of pension income a year through an annuity – so it’s certainly worth exploring whether this option is right for you. Many women and those in self-employment have much smaller state pensions and this could give them a welcome lift. According to ONS statistics for every 100 men aged 90 and over in 2014, there were 249 women!

much you will have to pay for this income boost will depend on your exact age – the older you get, the lower the cost – good news for all those centenarians.

The offer is open to anyone who will reach state pension age before April next year. After that date, the new single-tier state pension will kick in.

The Institute of Fiscal Studies has calculated that it would cost double what the government is asking for to fund an extra £1,300 of pension income a year through an annuity – so it’s certainly worth exploring whether this option is right for you. Many women and those in self-employment have much smaller state pensions and this could give them a welcome lift. According to ONS statistics, for every 100 men aged 90 and over in 2014, there were 249 women!

2. Defer your state pension

The way we think about retirement has changed – it is no longer a set-point in time but rather a gradual phasing in of income to free up spare time – and retirement does not necessarily have to mean that you stop working or earning.

If you’re still healthy, active and earning enough income from other sources, it may be prudent to delay taking your state pension. By doing this you can either earn extra state pension or benefit from a one-off lump sum.

If you have not yet claimed your state pension and you want to delay taking it up, you do not need to do anything. Those already drawing their state pension, but wanting to stop claiming it to earn more income, will have to contact their pension centre – the telephone number will be on any letters you have received from your pension centre.

For those who reach state pension age before 6 April 2016 (men aged 64 or more at April 2015 or women aged 62 or more at April 2015) the rate of deferral is very generous – 10.4% per annum plus the inflationary increases. In comparison, the lump sum alternative will be poor value for money.

For people reaching state pension age after 6 April 2016, the increase will be 5.8% per annum plus inflation and there will be no lump sum alternative.

3. Don’t sleep walk into income drawdown

It is important to remember that your pension income will very much be a function of the pension vehicle you choose.

Thanks to a raft of pension rule changes, if you’re over age 55 and hold a defined contribution pension pot, you can now take your pension savings anyway you want, subject to your marginal rate of income tax with 25% of your pot remaining tax-free.

So instead of buying an annuity which pays a fixed sum of money each year, many retirees are now choosing to keep their pension fund invested through income drawdown. Prior to the pensions changes it wasn’t mandatory to buy an annuity – this was abolished back in 2011 – but given the strict rules around income drawdown – for most people (around three-quarters) an annuity was the only viable option.

The beauty of an income drawdown strategy is the greater investment control it gives you over your pension capital. If you make the right investment decisions, your pension fund could even continue to grow over time.

But here’s the rub: income drawdown allows you to take your 25% tax free cash lump without having to do anything with the rest of your savings. In the past, taking cash would trigger a decision – usually the purchase of an annuity – with the remainder of your pension savings.

If you want to get the most from your income drawdown arrangement it is important not to stop at the tax free cash. Take a long hard look at your underlying investments and adjust these according to your retirement goals. Asset allocation after all is the biggest contributor to long term returns. Whatever you do – don’t sleepwalk into drawdown.

Maike Currie is associate investment director at Fidelity Personal Investing

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