Naz Financial

A Personal Financial Blog from Naz Miller

3 Phases of Retirement Living

As life expectancies go up, differing attitudes to the concept of retirement have evolved. Many people are now likely to live for 20 to 30 years beyond State Pension age. Retirement is no longer simply a period of winding down in the autumn years of our lives. A recent report from an independent charity, the Pensions Policy Institute (PPI), identifies 3 phases of retirement living and highlights the importance of each.

So, What Are the Three Phases of Retirement?

The 3 phases of retirement living identified by PPI are:

  1. The Independent Phase of later life in which individuals have low or no physical limitations.
  2. The Decline Phase in which individuals have mild physical limitations.
  3. The Dependent Phase in which individuals have severe physical limitations and difficulty performing activities needed for day-to-day independent living.

They describe each stage further in this infographic:

3 Phases of Retirement | Better Financial Health

And What Does This Tell Us?

Behind all the data they show, there are a number of truths that emerge:

  • As people transition through the phases of retirement, the risk of having poorer experiences increases, beginning in the Decline Phase and worsening in the Dependent Phase.
  • Those who remain in the Independent Phase for as long as possible are likely to have better retirement experiences.
  • In order to improve later life experience, older people may need additional support to remain in the Independent Phase for as long as possible.
  • The likelihood of transitioning out of the Independent Phase and into either the Decline or Dependent Phase increases with age.
  • People with higher levels of wealth are likely to remain in the Independent Phase for longer than those that have lower levels of wealth.
Retirement Living | avoid paying IHT

This last point resonates with me. Ensure that you have made adequate provision for your (potentially) longer retirement and you could well lengthen the time before you transition to Decline and Dependency.

As ever, please contact me to discuss how you can best make provision for your retirement.

About The Pensions Policy Institute

The PPI is an educational, independent research organisation with a charitable objective to inform the policy debate on pensions and retirement income provision. Their report, Living Through Later Life was published in July 2019. For further information, visit

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Naz Miller

I'm Naz and I'm a Financial Adviser. Prior to working in private practice, I spent 34 years working at Lloyds Bank in Cambridge and surrounding areas. My work has always focused on helping clients achieve their long-term financial objectives.

Glossary of Personal Financial Terms

AAA Rating

In short, AAA ratings (‘triple-A‘ ratings) are the highest credit rating available for an investment, such as a bond or company.

AAA ratings are issued to investment-grade debt that has a high level of creditworthiness with the strongest capacity to repay investors.

Similarly, the AA+ rating is issued by S&P (Standard and Poor) and is similar to the Aa1 rating issued by Moody’s. It comes with very low credit risk and indicates the issuer has a strong capacity to repay.