People turning 65 this year are expected to live another 20 years in retirement, according to an analysis of Office for National Statistics data by Prudential.
The firm warned that saving enough to last the duration of retirement was now more important than ever and highlighted the risks of drawing down an income in retirement from savings given this increased longevity.
Its analysis of the official estimate shows that someone who celebrates their 65th birthday in 2014 will typically live until they are nearly 85.
But they would need savings of around £121,000 to maintain a total annual income of £15,800 for 20 years, made up of a combination of 'income drawdown' and the state pension.
For those expected to live to the age of 90, Prudential calculated that they would need savings of around £139,000 to supply a total annual income of £15,800 for 25 years. Retirement of 30 years would demand a £154,000 savings pot.
Vince Smith-Hughes, Prudential's retirement income expert, 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 saves 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.'
He cautioned retirees to not overestimate the value of the state pension as a fall back should they exhaust their retirement pot.