Before you retire

Retirement

 The information in this guide was last updated on 01/04/2016

Here we take you through some of the options available for pensions, so that you can plan to enjoy your retirement, not worry about it.

Before you retire

It's never too early to start planning for your retirement. You can save as much into your pension as you like, but there's a limit on the tax relief available. There may also be tax penalties to consider.


Plan your retired life

Firstly you need to make sure your income and spending are going to match up.

Questions to ask:

  • Where can I get more help? A government service called Pension Wise is available to help you understand your retirement options.

  • What will your income be? If you have a Defined Contribution pension scheme (where you build up a pot to buy your benefits), you may want to shop around for annuities, and see how much your current pension fund and investments will give you as a secure lifetime income. If you’re not ready to buy an annuity, or you want to take more flexible benefits, you could look at flexi-access drawdown or drawing lump sums, which let you take an income from your pension while leaving some of your fund invested. If you have a Defined Benefit/Final Salary scheme, you should check your options with the provider. 

  • How will your spending change? Are you planning to move, to travel or enjoy expensive hobbies? Or are you happy to live simply?

If the figures don’t add up, you may need to think again. Where can you make savings? Can you afford to put more aside each month?

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Review your investments

If you have investments, decide if they’re in the right place. You could consider whether to move your money to lower-risk investments, that give you a predictable amount each month. If you move your money into high-risk investments which have the potential for higher losses, you won’t have the chance to make up for it later if you end up losing out.

Next: Taking your pension

Taking your pension
Life after work