Drink more to boost your pension annuity, suggests City analyst

Just as the millennial generation gets used to life without avocados in the hopes of saving for a house, new data released on Tuesday suggests a cheeky session at the pub might be the way to go for their elders, if they wanted to boost their pension.

The data from the Office for National Statistics said 29.2 million people in Great Britain were estimated to drink weekly, with those approaching retirement - that is, aged between 45 and 64, least likely to be teetotal.

Two thirds of those approaching retirement and living with another drank in the last week, the figures showed, with 57% who live by themselves enjoying a glass of alcohol.

By contrast, less than half of those aged between 16 and 24 drank in the last week, irrespective of whether they lived alone or with another.

Some quickly-released analysis of the numbers from Hargreaves Lansdown made some surprising suggestions on how the amount of alcohol consumed could impact on how much income a pension might pay-out.

It said a fairly boozy 24 pints of beer each week would boost the pay-out for a 65-year-old with a £100,000 pot by £279 each year, jumping from an annual income of £5,471 to £5,750.

With an average price of £3.60 per pint in the UK, such an increase would only allow an extra three weeks of drinking, however.

Less frequent imbibers could still enhance their pension payout; Hargreaves suggested, saying that drinking three bottles of wine each week gave a £96 annual income increase, with a £29 boost for those drinking a more reasonable six pints per week.

The financial services company put the calculations down to health conditions which could be linked to alcohol consumption ensuring even higher pension incomes.

It said that whilst someone aged 65 and a £100,000 pension who quaffs three bottles of wine a week might receive £5,567 per year, the combination of high blood pressure, high cholesterol and being overweight could boost the pay-out to £5,912.

“Whilst 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,” said HL’s senior pension analyst Nathan Long.

“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 payouts, so it pays to disclose all of your health information as ultimately they are not expecting you to live quite as long.”

Hearing that their parents might be able to drink more to enjoy a fatter pension might come as salt in the wound for many young Brits, however, as they struggled to cobble together a house deposit amid stagnant wages and stubbornly high residential property prices.

The idea that millennials could save up for a house by eschewing avocado on toast has become an internet meme in the last year, since Melbourne-based luxury property developer Tim Gurner suggested to 60 Minutes Australia that young Australians couldn’t afford property because they were spending all of their money on flash coffees and fancy brunches - including the aforementioned avocado dish.

Some quick, back-of-the-envelope calculations would quickly put that idea to bed, however, given it would take 6,000 servings of avocado on toast at £5 a pop to save a 15% deposit on a £200,000 terrace.