Thinking about retirement
There are quite a few things to think about - like how much money you've built up towards your retirement, and how much you'll actually need. This video is a great starting point. Grab a cup of tea and let comedian Mark Watson talk you through what you need to know about getting set up for your future.
Watch time: 6 mins 17 seconds
Make sure you’re retirement ready
1. Check the value of your current pension pot
The quickest way to do this is log in to your online account.
2. See whether you’re on track
Our short retirement quiz will help you picture the retirement lifestyle you want and check you’re on course.
3. Understand your income options
There are different ways to take money from your pension savings, so you’ll need to decide what best suits your plans.
The ‘need to know’ of retirement planning
Firstly, for extra guidance, make sure you take advantage of Pension Wise. It's a government-backed service for people aged 50+ providing free and impartial guidance to help you to understand your options at retirement. You can access the guidance online at moneyhelper.org.uk or call them on 0800 011 3797.
Check your retirement age
The value of your pension pot could be affected by the age you plan to retire. Make sure yours is accurate.
Nominate your beneficiaries
It’s not easy thinking about what happens if you pass away. But telling us who you’d like to receive your pension savings is really important.
Make sure your money will last
Try our retirement income calculator to see how adjusting your income could affect how long your pension savings might last.
How to protect your pension
Pension scams are on the rise. Make sure you know how to recognise one.
Time it right
It’s not just how you take your money, but when, that matters. Remember, your pension income needs to last you the whole of your retirement. So leaving some – or all – of your pension savings invested for longer could make a difference.
And before you start accessing your hard-earned pension savings, it’s a good idea to weigh up all the pros and cons. Find out what to consider
Some people choose to start withdrawing pension savings while they’re still working. Here’s what you should know about doing that.
- You can usually take up to 25% of your pension pot tax free, without it affecting any future contributions you choose to make.
- It may be worth thinking about leaving your tax-free cash entitlement for now, unless you have a specific purpose for it. Don’t forget, it would remain in a tax-free environment and will still be available to you later on - it may even have increased in value.
- If you take more than the tax-free portion of your pension, it triggers something called the money purchase annual allowance (MPAA). This means that the combined contribution from you and your employer will only receive tax relief up to £10,000 a year, reduced from a maximum of £60,000 (subject to personal circumstances). This applies across all your pension savings, not per scheme.
- You should carefully consider the amount you withdraw and how this will impact the amount of tax you’ll need to pay. Money you take out of your pension over the tax-free cash amount is treated as income and added to any other income, such as salary, to arrive at your total taxable income for the year. This is different to withdrawing money in an ISA or savings account, for example.
If you are thinking of taking a lump sum from your pension this calculator will show you how this will affect your future retirement income. It will also show you how much tax you might have to pay.
You can start to take an income from your pension once you turn 55 (this is due to change to 57 from 2028). And we’re on hand to guide you through the process of accessing money invested in your pension.
Get more planning tips from our webinar
If this all sounds like a lot to think about, don't worry - we're here to support you on your journey to retirement. Our pre-recorded webinar is full of practical and relatable guidance. We'll help you break down what your retirement could look like, and the steps you can take to plan ahead.
Watch now