Making The Most Of Your Future

Most of us dream of a comfortable, enjoyable retirement and have plans for the things we would like to do. Planning is key to ensure that you have the funds for the things you would like to do, our latest guide takes you through some of the key things you should consider when you are planning for your retirement.
About Tudor Franklin IFA

Tudor Franklin was established by Richard Meats and Bharat Chudasama, with a vision for a professional financial planning and advice service that can provide clear value to our clients at any stage in their financial life. With over 25 years joint experience advising clients on such matters as investments, pensions, inheritance tax planning and protection, we pride ourselves on being professional and delivering advice in a clear and understandable way.
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About Tudor Franklin IFA

retirement pension retirement planning retire PENSION retire SAVE State PENSION people year make
MAKING THE 
MOST OF YOUR 
FUTURE
Getting your retirement plans in motion
G U I D E  T O
JULY 2022
02      |      GUIDE TO MAKING THE MOST OF YOUR FUTUREW E L C O M E
W elcome to our Guide to 
Making the Most of Your 
Future. When it comes to 
retirement planning, there are a lot of 
things to consider. First and foremost, 
you need to make sure that you have 
enough saved up to cover your costs. 
This includes things like living  
expenses, health and care costs,  
and any other debts or financial 
obligations you may have.
You also need to think about how  
you want to spend your retirement  
years. Do you want to travel? Spend  
time with family and friends? Pursue 
hobbies or interests? Whatever you  
want to do, it’s important to have a  
plan in place so that you can make  
the most of your golden years.
Last but not least, don’t forget to  
factor in inflation when planning for 
your retirement. Over time, the cost of 
living will go up as we’ve seen recently, 
so you’ll need to make sure that your 
savings can keep pace with rising prices. 
By planning ahead and taking all of  
these factors into consideration, you  
TIME TO DISCUSS 
GROWING YOUR 
WEALTH FOR YOUR 
FUTURE RETIREMENT?
Retirement planning can be 
complex. It’s also important to 
start sooner rather than later. 
Obtaining expert professional 
!nancial advice will ensure you 
are on track to meeting your 
goals. "e sooner you start 
planning, the more likely you 
are to achieve a comfortable 
retirement. To !nd out more or 
to discuss your vision for your 
retirement – please contact us.
Getting your retirement plans in motion
G U I D E  T O 
M A K I N G  T H E  M O S T 
O F  Y O U R  F U T U R E
A PENSION IS A LONG#TERM INVESTMENT. 
THE FUND VALUE MAY FLUCTUATE AND 
CAN GO DOWN, WHICH WOULD HAVE 
can look forward to a comfortable  
and enjoyable retirement. z
AN IMPACT ON THE LEVEL OF  
PENSION BENEFITS AVAILABLE.
ONCE MONEY IS PAID INTO A PENSION, 
IT CANNOT BE WITHDRAWN UNTIL YOU 
ARE AGED AT LEAST 55 $INCREASING TO 
57 FROM 2028 UNLESS YOUR PLAN HAS A 
PROTECTED LOWER PENSION AGE%.
YOUR PENSION INCOME COULD ALSO 
BE AFFECTED BY INTEREST RATES AT 
THE TIME YOU TAKE YOUR BENEFITS. 
THE TAX IMPLICATIONS OF PENSION 
WITHDRAWALS WILL BE BASED ON YOUR 
INDIVIDUAL CIRCUMSTANCES, TAX 
LEGISLATION AND REGULATION, WHICH 
ARE SUBJECT TO CHANGE IN THE FUTURE.
PAST PERFORMANCE IS NOT  
A RELIABLE INDICATOR OF  
FUTURE PERFORMANCE.
THE VALUE OF INVESTMENTS  
AND INCOME FROM THEM MAY GO 
DOWN. YOU MAY NOT GET BACK  
THE ORIGINAL AMOUNT INVESTED. 
03      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE02 | WELCOME
Getting your retirement plans in motion
04 | PLANNING FOR THE FUTURE
Insight into the hopes, fears and 
aspirations of people approaching  
and in retirement
06 | FAILURE TO SAVE  
ENOUGH FOR OLD AGE
Meeting the financial demands  
you may face in later life
07 | NON-RETIREES
It’s never too late to think  
about saving for retirement
08 | DEVELOP A ROBUST  
RETIREMENT PLAN
Having a good idea of the  
lifestyle you want is key
09 | TRIPLE LOCK SET ASIDE
State Pension is still the bedrock of  
many pensioners’ retirement income
10 | RAISING OF THE  
STATE PENSION AGE!
Encouraging individuals to save  
longer for their retirement
11 | COUNTDOWN  
HAS COMMENCED
Will I be able to retire when I want to?
CONTENTS12 | PLANNING FOR  
EARLY RETIREMENT
Financial consequences to  
stopping work in your 50s
!
14 | PENSION ALLOWANCES
Understanding how to make  
the most of them
16 | PENSION LIFETIME 
ALLOWANCE
What to consider if you are  
approaching the limit
17 | ACCUMULATING  
A NEST EGG
What’s making the retirement  
journey even more difficult?
18 | CHANGING LANDSCAPE
No longer a one-size-fits-all  
approach to retirement planning
20 | BUILDING UP  
YOUR PENSION POT 
Plan to live your best life in later life
21 | LEAVING WORK BEHIND
Making an early exit from working life
23 | MIND THE GENDER  
PENSION GAP
On average, women retire with  
less than half the income of men
25 | RISING TO THE  
DEFINING CHALLENGE  
OF OUR AGE
More pension savers are  
asking where their funds  
are invested
26 | WITH MORE FREEDOM 
COMES GREATER 
RESPONSIBILITY
How much money will I  
actually need when I do  
eventually retire?
28 | TRACKING DOWN 
SAVINGS FROM A  
PREVIOUS EMPLOYER
Savers paying fees to  
multiple providers across  
all their pensions
29 | ACCESSING  
YOUR PENSION
5 things you need to consider  
before deciding to withdraw  
money from your pot
30 | REVIEWING YOUR 
FINANCES SOONER  
RATHER THAN LATER
Bolster your retirement lifestyle 
as you approach your planned 
retirement date
People aged between 55 and 64 
are now less con!dent about 
their retirement than they were a 
year ago, with over-55s most likely to be 
worried about rising prices.
Many of us are unsure about what to 
expect when it comes to planning for the 
future. Study a&er study has indicated that 
many of us aren’t sure whether we will be 
able to retire comfortably. It really does 
seem that it’s increasingly di'cult for 
some to feel con!dent about retirement.
RETIRED PEOPLE
New research has highlighted an 
interesting insight into the hopes, fears 
and aspirations of people approaching 
and in retirement[1]. How much your 
retirement will cost depends on your 
lifestyle, so it di(ers for everyone. "at 
said, it may be more expensive than you’d 
expect. In)ation concerns have been 
rising since last summer and rising prices 
pose a problem for retired people. 
"e research also revealed 33% of 
UK adults are worried about rising 
prices of everyday items, up from 27% 
in September 2021. People aged over 55 
(36%) are most likely (of all age groups) 
to say they are worried about the rising 
prices of day-to-day items.
RISING PRICES
Women (40%) are more anxious about 
rising prices than men (26%). Retirement 
con!dence is also falling for over-55s. "e 
proportion of people aged over 55 who 
are con!dent about retirement has fallen 
in the last year.
P L A N N I N G  
F O R  T H E  F U T U R E
Insight into the hopes, fears and aspirations of  
people approaching and in retirement
In December 2021, 41% of people 
aged between 55 and 64 (who weren’t 
yet retired) said they were confident 
that they have saved enough for a 
comfortable retirement, compared to 
44% in December 2020.
COMFORTABLE RETIREMENT 
55% of over-65s (who weren’t yet retired) 
are con!dent they have saved enough for 
retirement, compared to 60% in December 
2020. Women (35%) are much less likely 
than men (52%) to be con!dent about 
their retirement prospects.
However, mass a*uent people – 
those with assets of between £100,000 
and £500,000 excluding property – are 
much more likely to be con!dent about 
retirement. Some 71% of mass a*uent 
consumers are con!dent that they 
have saved enough for a comfortable 
retirement, compared to 43% of the 
population as a whole.
PURCHASING POWER 
The proportion of mass affluent 
consumers who are confident about 
retirement has also increased, from 
60% in December 2020 to 71%. 
Previous research found that a large 
proportion (84%) of this group saved 
money during the COVID pandemic 
and one in five (20%) mass affluent said 
their household saved over £10,000. 
This group is more likely to have put 
these savings into a pension (8% vs  
5% UK adults).
"ose on !xed incomes will see the 
purchasing power of their incomes fall. 
"ose drawing an income from their 
pension fund may be forced to withdraw 
more money from their fund than they 
anticipated and increase the risk of 
running out of funds in retirement.  
CAUTIOUS INVESTORS
One likely reason why over-55s are 
more worried about in)ation is that 
they typically have a larger proportion 
of their savings in deposit accounts that 
are not keeping pace with rising prices. 
Wealthier households are probably more 
con!dent because they tend to have a 
greater proportion of their investments in 
real assets such as equities and property, 
which have risen in value over the past 
few years.
Rising inflation poses a dilemma for 
cautious investors. They are generally 
uncomfortable with the volatility that 
investing in stock market-based funds 
can bring but are also concerned that 
their savings fail to keep pace with rising 
prices. One option for them is a fund 
that invests in a wide range of assets but 
which helps to smooth out the ups and 
downs of the stock market. z
Source data: 
[1] !e LV= Wealth and Wellbeing Monitor 
is a quarterly survey of 4,000+ consumers 
which examines their attitudes to spending, 
saving and retirement. LV= surveyed 4,000+ 
nationally representative UK adults via an 
online omnibus conducted by Opinium in 
December 2021.
04      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
IN DECEMBER 2021, 41% OF PEOPLE AGED 
BETWEEN 55 AND 64 (WHO WEREN’T YET 
RETIRED) SAID THEY WERE CONFIDENT 
THAT THEY HAVE SAVED ENOUGH FOR A 
COMFORTABLE RETIREMENT, COMPARED 
TO 44% IN DECEMBER 2020.
05      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
The significant increase in 
property prices in recent years 
has likely shifted many people’s 
expectations of the role property wealth 
will eventually play in supporting their 
retirement. With people spending longer 
in retirement, one of the challenges that 
many need to overcome is how to fund it 
and how to meet the financial demands 
they may face in later life, such as the 
cost of long-term care. 
Failure to save enough for old age 
is forcing more people to use their 
property to provide income. Research 
shows so-called ‘Hippies’, or the ‘Home 
is my Pension’ generation, are increasing 
at a signi!cant rate. 22% of people are 
planning ahead for their retirement and 
expect to use the value of their home[1]. 
"e !ndings indicate that a third of all 
people who aren’t currently retired (35%) 
own a property but have less than £10,000 
saved in their pension pot.
HOLDING NO PENSIONS SAVINGS 
Worryingly, a further 22% of people hold 
no pensions savings at all. "e signi!cant 
number of small or empty pots, coupled 
with the 24% increase in median house 
price values in England and Wales since 
2016[2], could be driving more people to 
consider using their property wealth to 
fund their retirement.
Property is o&en the largest asset 
someone has when they reach retirement, 
especially if they have lived there for 
quite a while, and will o&en signi!cantly 
outweigh any pensions savings they have. 
ACCESSING PROPERTY WEALTH 
Based on current house prices in England 
and Wales, the average homeowner could 
access over £72,988 in equity release, for 
instance[3]. People who aren’t currently 
retired expect to downsize their property 
(10%), sell their property (9%) or access 
equity via a lifetime mortgage (6%) to 
help fund their later life.
While many people looking ahead to 
retirement are hoping to access property 
wealth, there are a signi!cant number of 
retired homeowners who could also bene!t 
from considering the role their property 
might play in funding their lifestyle. 
Source data: 
[1] Opinium survey of 4,000 UK adults 
between 31 October and 3 November 2021
[2] O"ce for National Statistics, House price 
statistics for small areas in England and 
Wales: year ending March 2021, Nov 2021
[3] Legal & General customers accessed, on 
average, 24.5% of the value of their home 
through equity release, putting the expected 
amount that can be accessed across England 
and Wales at £72,988: O"ce for National 
Statistics, House price statistics for small 
areas in England and Wales: year ending 
March 2021, Nov 2021
MAIN SOURCE OF INCOME 
Nearly two-thirds of people over 65  
are dependent on the State Pension as 
their main source of income and are  
also homeowners. 
"e !ndings show there are a large 
number of people currently in retirement 
who may be on a limited income and 
could bene!t from the likely increases  
in the value of their home. z
F A I L U R E  T O 
S A V E  E N O U G H 
F O R  O L D  A G E
Meeting the #nancial demands  
you may face in later life
06      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
How much do you think you’ll 
need to fund your retirement? 
Of course, the answer to that 
question will depend on what you want 
to do when you stop work. Worryingly, 
almost half of non-retirees (46%) are 
unable to identify how much they believe 
retirees receive annually from their State 
Pension, according to a survey[1].
Only 53% knew that retirees receive 
£9,628 per year from their State Pension, 
with those aged 55 and over being more 
likely to identify correctly how much 
retirees receive (70%), compared to only 
40% of those aged between 18 and 34.
SAVING IN A PENSION 
The survey also showed that over half of 
non-retirees with a pension are worried 
that they are not saving enough for their 
retirement (56%), with only one in five 
(21%) confident that the amount they are 
saving in a pension is enough to let them 
live the lifestyle they want when they 
stop working.
In fact, three-quarters (75%) of 
non-retirees say they believe they could 
save extra into their pension to boost 
their pension savings, with the average 
additional contribution being £68  
per month. 
ADDITIONAL CONTRIBUTIONS
One in six (17%) say they could only 
pay in less than £25, just over a quarter 
(26%) say they could pay in £25 to £50 
in additional contributions, while a 
further quarter (25%) say they could pay 
in between £51 and £200 in additional 
contributions. Seven per cent say they 
could pay in more than £201 per month 
in additional contributions.
Most people in the UK who work or 
undertake caring responsibilities will be 
eligible for a full State Pension if they 
have worked and paid National Insurance 
contributions or been a carer for 35 years. 
RELY ON THE STATE PENSION 
But the research !nds that the majority of 
the public (78%) do not know how much 
new retirees with a full State Pension 
will receive. As could be expected, older 
people and those who are retired tend to 
have the highest awareness, with almost 
half (46%) of those aged 65 and over and 
two in !ve retirees (43%) saying they are 
aware how much retirees will receive from 
a full State Pension. 
However, even among these groups, many 
are unaware of the amount that retirees 
receive (54% of those 65+ and 57% of those 
who say they are retired). When asked if 
savers plan to rely on the State Pension 
come retirement, just over a third (36%) 
said that they expect to rely on it as their 
main source of income, especially those 
aged between 55 and 64 (49%). However, 
one in !ve said that they remain unsure 
what they will rely on in retirement (18%).
ADEQUATE INCOME  
IN RETIREMENT 
Furthermore, younger people (those 
aged between 18 and 34) and those with 
other types of pension are less likely to 
say they will rely on the State Pension as 
their main source of income (26% and 
31% respectively).
For many people, the best way to 
provide an adequate income in retirement 
is to save gradually throughout their 
Source data: 
[1] Pensions and Lifetime Savings Association 
(PLSA) – a total of 2,075 people took part in 
the nationally representative survey, carried 
out by Yonder Consulting. !e survey took 
place between 25 August and 26 August 2021.
entire working life and save what they 
can a(ord. However, depending on 
their !nancial circumstances, some may 
prefer to save less when they are younger 
and more when they are older, especially 
if they expect to receive an inheritance 
before they retire.
OPTIONS TO ADD TO YOUR 
NEST EGG
Unfortunately, many of us struggle to 
put enough into our pension pot during 
our working lives because the costs of 
buying a house, raising a family and 
covering day-to-day living expenses eat 
into disposable income. 
"e earlier you start retirement 
planning, the better. However, with the 
demands of managing a busy working 
and personal life, this is something that 
can understandably be neglected. But it’s 
never too late to think about saving for 
retirement – even if you are planning to 
give up work in just a few years’ time,  
you will have options to add to your  
nest egg. z
N O N - R E T I R E E S
It’s never too late to think about saving for retirement
IN FACT, THREE-QUARTERS (75%) OF NON-RETIREES 
SAY THEY BELIEVE THEY COULD SAVE EXTRA INTO 
THEIR PENSION TO BOOST THEIR PENSION SAVINGS. 
07      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
People planning for retirement 
should think hard about what 
they want to do when they 
eventually stop work. It is helpful to  
have a good idea of the lifestyle you 
want, how much it will cost and how  
you are going to pay for it. 
With so much going on in your life – 
from family and work to pursuing your 
passions – retirement planning may not 
have been your priority. But now you 
want to make sure your pension and 
overall financial situation will allow 
you to keep up your current lifestyle 
and enjoy your golden years. The more 
enthusiastic you are about retiring, the 
more likely you are to develop a robust 
retirement plan.
DIY APPROACH TO RETIREMENT
Obtaining professional financial advice 
is key to ensuring you achieve the 
retirement you want. But 8 million 
people are planning a DIY approach  
to retirement and many don’t know how 
to avoid running out of money, avoiding 
a big tax bill or leaving an inheritance, 
new research has highlighted[1].
Millions of people don’t understand 
their retirement options when they 
stop work. More than a third (35%) 
of pension holders admit they know 
nothing about the product options at 
retirement and the pros and cons of  
each option.
PRODUCT OPTIONS  
AT RETIREMENT
And more than one in five (22%) of those 
planning to retire in the next five years 
know nothing about the product options 
at retirement. And they don’t understand 
some of the big risks in retirement. 
Worryingly, 35% of pension holders 
know nothing about how stock market 
falls can affect retirement savings.
Of those surveyed, 34% commented 
they don’t know how to ensure they will 
not run out of money in retirement. Half 
of people with a pension over £100,000 
didn’t know a good amount about how 
to take money from their pension in a 
tax-efficient way.
TAKING PROFESSIONAL 
FINANCIAL ADVICE
Only 34% of married people understand 
how to ensure their spouse will be le& 
with enough pension if they die. Although 
people are unclear about their options, 
worryingly many are not considering 
taking professional !nancial advice.
Only 39% of pension holders are 
planning on taking financial advice 
when they retire, with 31% planning to 
DIY their retirement. Only half (52%) 
of mass affluent people – those with 
assets of between £100,000 and £500,000 
excluding property – are planning to  
take professional financial advice.
SERIES OF BIG  
DECISIONS TO MAKE 
"e top occasions where mass a*uent 
consumers feel that people should seek 
professional !nancial advice are: choosing 
to invest a large lump sum (43%), 
Inheritance Tax planning (44%) and 
deciding how to access a pension (40%).
People have a series of big decisions to 
make as they approach the end of their 
working life and each one can make a huge 
di(erence to their retirement. For example, 
should you draw down your pension in one 
go or over a period of time? Should you take 
your 25% tax-free cash or leave the money in 
your pension fund to grow? Should you buy 
an annuity to guarantee an income for the 
rest of your life or go for drawdown?+"ese 
are questions your professional !nancial 
adviser will help answer.
+
MAKING BIG  
FINANCIAL DECISIONS
Obtaining advice compensates for the 
emotional biases people have when they 
make big financial decisions.+A DIY 
approach to managing large pension 
funds at retirement is fraught with risk. 
People can easily buy the wrong 
products, incur unnecessary tax bills 
or simply exhaust their retirement 
funds too quickly, whereas an adviser 
will provide an impartial, cool-headed 
approach to their client’s finances and 
offer solutions that the client will not 
even have considered. z
D E V E L O P 
A  R O B U S T 
R E T I R E M E N T 
P L A N
Having a good idea of the  
lifestyle you want is key
Source data: 
[1] !e LV= Wealth and Wellbeing Monitor is 
a quarterly survey of 4,000+ consumers which 
examines their attitudes to spending, saving 
and retirement. !e Monitor also surveys the 
attitudes of mass a$uent consumers, those 
with assets of between £100,000 and £500,000 
excluding property, who are a key target 
market for #nancial advisers. LV= surveyed 
4,000+ nationally representative UK adults via 
an online omnibus conducted by Opinium in 
June% 2021.
08      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
The earnings benchmark of the 
State Pension triple lock has been 
temporarily set aside for this year. 
"e Department for Work and Pensions 
(DWP) con!rmed on 7 September 2021 
that the State Pension triple lock rule has 
not been applied for the current 2022/23 
!nancial year over concerns of the 
potential costs involved.
It comes a&er the O'ce for Budget 
Responsibility (OBR) said in July last year 
that pensioners could see their payments 
rise by as much as 8% due to the 
guarantee. "e triple lock guarantees that 
pensions grow in line with whichever is 
highest out of earnings, in)ation or 2.5%.
WHAT IS THE TRIPLE LOCK  
FOR PENSIONS?  
"e triple lock has been a core 
commitment of every government budget 
since 2010, when it was announced by the 
Coalition Government made up of the 
Conservatives and the Liberal Democrats. 
It was a response to the fact that the real 
value of the State Pension had fallen, and 
it looked to guarantee that this vital state 
bene!t would continue to rise every year.  
!e ‘triple lock’ refers to the idea  
that the State Pension rises in line  
with the highest of these three  
measures every year:  
  A )at 2.5% rise  
T R I P L E  L O C K 
S E T  A S I D E
State Pension is still the bedrock of 
many pensioners’ retirement income
   Average earnings growth  
(measured from May to July each year)  
   In)ation (measured in the year  
from September every year)  
"is annual rise is applied to the basic 
State Pension as well as the new State 
Pension (for people retiring a&er 2016). 
"e government uses it to make sure that 
people’s retirement bene!ts keep pace 
with the rising cost of living.  
BEDROCK OF  
MANY PENSIONERS’ 
RETIREMENT INCOME
Understandably pensioners are disappointed 
that the triple lock has been removed for this 
year, as the State Pension is still the bedrock 
of many pensioners’ retirement income. 
Women and those who are self-employed 
are among those who will be particularly 
a(ected by the temporary scrapping of the 
triple lock, as they are more likely to rely 
on the State Pension in retirement.
However, it is encouraging that the 
government hasn’t abandoned its longer-
term commitment. "e 2.5% minimum 
rate has been used on a number of 
occasions, and is having the e(ect of 
slowly increasing what people receive in 
real terms. "e long-term trajectory of the 
State Pension will also be more important 
to younger people, more than a one-o( 
hike in line with earnings this year. z
09      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
R A I S I N G  O F  T H E 
S T A T E  P E N S I O N  A G E!
Encouraging individuals to save longer for their retirement
The normal minimum pension  
age (NMPA), currently 55, is  
the earliest age that members  
of a registered pension scheme can  
draw their benefits without incurring  
an unauthorised payments tax charge,  
other than in cases of ill health  
or where they have a protected  
pension age.
Pensions tax rules in the UK are some 
of the most complicated aspects of UK 
tax legislation – not ideal when pretty 
much everyone has to interact with them. 
The last thing that is needed is anything 
that significantly adds to this complexity, 
particularly where the impacts will be 
felt for decades.
INCREASING ON A  
STAGGERED BASIS
"e increase in NMPA to 57 is intended 
to align with the raising of the State 
Pension age to 67, and will reinstate the 
ten-year di(erence between the two ages. 
"e State Pension age is increasing on 
a staggered basis depending only upon 
your date of birth. Although younger 
people lose out by having to wait longer, 
the position is clear to everyone and is as 
simple and fair as it can be. Unfortunately, 
the implementation of the increase in the 
NMPA is neither simple nor fair and it is 
going to be incredibly complicated.
Individual members of registered pension 
schemes who do not have a protected 
pension age will not be able to take scheme 
bene!ts before age 57 a&er 5 April 2028. 
However, members of uniformed public 
service pension schemes and those with 
unquali!ed rights to take their pension 
below age 57 will be protected from  
these changes.
TRANSFERRED TO A NEW 
PENSION SCHEME
HM Revenue & Customs have indicated 
that where pension schemes rules include 
a reference to benefits being taken from 
age 55, this would be an unqualified 
right; however, a reference to taking 
benefits from the NMPA would not  
meet the requirement. 
Increasing the NMPA reflects increases 
in longevity and changing expectations 
of how long we will remain in work and 
in retirement. Raising the NMPA to age 
57 could encourage individuals to save 
longer for their retirement, and so help 
ensure that individuals will have greater 
financial security in later life. z
10      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
Are you ‘mid or late career’ or 
planning to retire within ten 
years? If the answer’s ‘yes’, then you 
probably want to know the answers to these 
questions: Will I be able to retire when I 
want to? Will I run out of money? How can 
I guarantee the kind of retirement I want?
But, for many di(erent reasons, 
planning for retirement is a commonly 
overlooked aspect of personal !nancial 
planning and this can o&en lead to anxiety 
as your age of retirement approaches. 
We’ve provided some ideas about how 
to boost your pension savings and help 
achieve your retirement goals sooner. 
REVIEW YOUR CONTRIBUTIONS
Sometimes the simplest solutions are the 
most effective. If you want to boost your 
retirement savings, the simplest solution 
is to increase your contributions. You 
may think you can’t afford to, but even a 
slight increase can make a big difference.
 For those lucky enough to receive a 
pay rise in line with inflation every year, 
increasing your pension contributions 
by just 1% could add thousands to your 
eventual pension pot. The reason why 
a relatively small increase in pension 
contributions can result in such a large 
increase in the value of your pension pot 
is because of the power of compounding.
The earlier you invest your money, 
the more you benefit from the effects 
of compounding. Adding more money 
to your pension pot by increasing 
your contributions just makes the 
compounding effect even better.
REVIEW YOUR STRATEGY
A missed opportunity for many pension 
holders is failing to choose how their 
pension is invested. Some people leave 
this decision in the hands of their 
workplace or pension provider.
Firstly, you should know that you don’t 
have to hold a pension with the provider 
your employer has chosen. You can ask them 
to pay into a di(erent pension, allowing you 
to choose the provider while considering 
the type of funds they o(er and the fees they 
charge. Your employer can con!rm whether 
they will pay into a pension other than the 
workplace pension, as many will not.
Secondly, many pension providers 
will give you several options for 
investment strategies. If you’re in the 
default option, you could achieve higher 
returns with a different strategy (though 
this will usually mean taking on more 
investment risk). Note that this may 
not be appropriate in all circumstances, 
particularly if you are close to retirement. 
KNOW YOUR ALLOWANCES
When you save in a pension for your 
retirement, the government adds tax 
relief on top of the money you contribute, 
helping you to grow your savings faster. 
However, there’s a limit to the amount of 
contributions you can personally claim 
tax relief on each year, which is 100% of 
your gross earnings or £3,600 pa if more. 
In addition, there is a limit on tax e'cient 
funding called your ‘annual allowance’. It’s 
currently £40,000 (tax year 2022/23), and 
in some cases may be lower. "e annual 
allowance applies to pension funding from 
all sources, including your employer, and  
if exceeded means you will pay tax on  
the excess.
If you want to contribute more than 
your annual allowance into your pension 
in one tax year (for example, if you’ve 
received a windfall and want to put it 
aside for the future), it’s worth knowing 
that you can use any unused allowances 
from up to three previous tax years as 
long as you had a pension in place in 
those years. Bear in mind that your own 
tax-relievable contributions are capped  
at the level of your earnings or £3,600 pa 
if more.  
So, if you have £10,000 of unused 
allowance in each of the past three 
years, that’s another £30,000 you can 
add to your pension this year without 
su(ering a tax charge. "e tax relief on 
this amount would be at least £6,000, 
depending on your tax band.
TRACE LOST PENSIONS
Usually, starting a job with a new 
employer means starting a new pension. 
And, when that happens, some people 
may overlook the pension they had with 
their last employer. As a result, many 
people have pensions with previous 
employers that they’ve lost track of – 
and rediscovering them can give a huge 
boost to their retirement savings.
You can trace old pensions by getting 
in touch with the provider. Look 
through any documentation you still 
have from your past employers to see 
if you can find your pension or policy 
number. If you can’t, you can contact 
the provider anyway and they should be 
able to find your pension by using other 
details, such as your date of birth and 
National Insurance number. 
If you’re not sure who the  
provider is, start by asking your 
previous employer. z
C O U N T D O W N  H A S 
C O M M E N C E D
Will I be able to retire when I want to?
11      |      GUIDE TO MAKING THE MOST OF YOUR FUTUREIF YOU HAVE £10,000 OF UNUSED ALLOWANCE IN 
EACH OF THE PAST THREE YEARS, THAT’S ANOTHER 
£30,000 YOU CAN ADD TO YOUR PENSION THIS YEAR 
WITHOUT SUFFERING A TAX CHARGE.
P L A N N I N G  
F O R  E A R L Y 
R E T I R E M E N T
Financial consequences to 
stopping work in your 50s
Early retirement may be the 
ultimate dream for some, but 
the coronavirus (COVID-19) 
pandemic made it the only option 
for many. Figures from the Office for 
National Statistics showed that over-50s 
had the highest redundancy rate between 
December 2020 and February 2021[1].
Retiring early can give you that  
change of lifestyle you’ve been craving, 
open doors to new experiences and 
potentially improve your health. But 
there are financial consequences to 
stopping work in your 50s.
 
WHAT IS THE FINANCIAL IMPACT 
OF EARLY RETIREMENT?
Traditionally, people retired between the 
ages of 60 and 65, but there’s no set age 
that you need to give up work. In fact, 
anyone with a pension pot can access it 
from age 55 – although this is set to rise 
to age 57 from 2028 unless your plan has 
a protected lower pension age.
Retiring early requires some careful 
planning. It can put significant pressure 
on your funds as your new income is 
likely to be less than your pre-retirement 
earnings. You might have various sources 
of income for your retirement ranging 
from your personal and/or workplace 
pension, the State Pension, investments 
and other savings. Reviewing your 
financial situation and determining 
how much money you need to live a 
comfortable life in retirement is an 
important first step.
Something to bear in mind: if you’re 
aged over 55, your State Pension won’t 
be paid until you reach age 67. If you 
stop working before then, you could be 
relying on income from your private 
pension savings for more than a decade. 
It’s also worth bearing in mind the 
impact of in)ation which, as we've seen 
recently, is leading to a cost of living 
crisis. "e Bank of England (BoE) raised 
interest rates on 16 June by 25 basis points 
or 0.25 percentage points, the latest step 
in its ongoing e(ort to tame UK in)ation.
"e move took the BoE’s main interest 
rate to a 13-year high of 1.25%, from 1% 
previously. Rates stood at just 0.1% as 
recently as last December. In)ation in the 
UK is set to reach 11% later in 2022 as 
the recent surge in energy prices, driven 
by Russia's invasion of Ukraine, triggers 
a sharp rise in the country’s energy price 
cap, the BoE said. CPI in)ation stood at 
9% in April, a 40-year high.
HOW TO ASSESS YOUR 
FINANCIAL SITUATION
Understanding your individual financial 
situation can make a big difference when 
it comes to making decisions around 
your retirement savings. Fully assessing 
your personal finances can help give 
you a clearer picture of whether early 
retirement is feasible. 
HERE’S A CHECKLIST OF  
WHAT YOU SHOULD CONSIDER:
1. HOW DO YOU PLAN FOR  
A VARIED RETIREMENT?
If you’re planning to retire early, think 
about what type of lifestyle you want to 
enjoy in later life. This will then help you 
determine what you’re saving towards. 
You might plan to travel, embark on a 
journey of further education or simply 
spend more time with loved ones – 
whatever you decide to do, you’re  
going to have demands on your 
retirement income.
When you’re reviewing your financial 
plans, it could be worth looking at 
those first early years of retirement 
as something separate. For example, 
including more in the budget for 
12      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
multiple holidays a year, or dinners out 
and trips to the theatre. Then take a 
look at how your lifestyle may modify as 
you slow down in later life. There may 
be fewer trips and holidays to take, but 
there could be increased care costs. 
Taking early retirement means that 
you almost have to plan for two different 
retirements. One that caters to the 
immediate future, where you’re likely 
to still be very active. And one where a 
slower pace of life comes into play. Each 
will have a different focus and therefore 
different demands on your money. 
2. HOW MANY YEARS DO YOU 
EXPECT TO BE RETIRED?
There are obviously no guarantees on 
how long any of us will live, but when 
it comes to retirement planning, you'll 
need to make an informed guess. 
It's worth considering family history, 
as well as factors such as your gender 
and geographical region. If you expect 
to live to around 85, but plan to retire 
at 55, you’ll need to save enough to 
support yourself for 30 years – but don't 
forget, you may live a lot longer than you 
expect, and you're likely to want leave 
something for your loved ones.
3. HOW MUCH WILL  
YOUR STATE PENSION BE?
In order to understand your income 
requirements in later life, you'll need to 
know when you can collect your State 
Pension and how much it's likely to be. 
"e State Pension age is under review 
and is gradually being pushed back so it's 
in line with life expectancy. Other factors, 
such as your gender and the year you were 
born, make State Pension ages vary.
The State Pension rules changed 
radically on 6 April 2016, for men born 
on or after 6 April 1951 and women born 
on or after 6 April 1953. There is a ‘single 
tier’ pension payment for people in this 
age group with a ‘full level'. In 2022/23, 
the full level of the new State Pension 
increased by 3.1% taking it to £185.15 a 
week, or £9,627.80 a year.
If you reached state pension age before 6 
April 2016, the changes don’t a(ect you. In 
this case, the Basic State Pension is £141.85 a 
week in 2022/23 (£7,376.20 a year). If you’re 
married, and both you and your partner have 
built up a full state pension, you’ll get double 
this amount in 2022/23 – so £283.70 a week. 
But if your partner hasn’t built up their own 
State Pension, they’ll still be able to claim a 
State Pension based on your record.
If you reached state pension age 
before 6 April 2016, you may also have 
built up some Additional State Pension, 
previously known as the State Earnings 
Related Pension Scheme (SERPS) or 
State Second Pension (S2P) which will 
be in addition to the basic state pension 
shown above. For those reaching state 
pension age after 5 April 2016, any 
additional state pension entitlement has 
been consolidated within the ‘single tier’ 
pension amount.
4. HOW MUCH DO YOU HAVE IN 
YOUR PRIVATE PENSION POT?
As the State Pension is not really enough to 
live on, the likelihood is that workplace or 
private pensions will make up a signi!cant 
part of your retirement income. 
When you retire, you can use some or all 
of your pension savings to buy an annuity, 
which then pays you a regular retirement 
income for either a set period, or for 
life. Alternatively, you can keep your 
savings in your pension pot and 'draw 
down' only what you need, as and when 
you need it. You must have a defined 
contribution pension to be able to do this 
(your workplace pension provider will be 
able to inform you on whether you do).
"e !rst step, before making a decision, 
would be to track down all of your pension 
pots and ask for a pension forecast. Estimate 
how much you can achieve via a drawdown, 
an annuity or a combination of both. And 
remember, the value of any investments can 
fall as well as rise and isn’t guaranteed.
5. HOW CAN YOU ENSURE YOUR 
PENSION POT WILL LAST?
Having an understanding of your 
retirement income and outgoings can help 
you to plan for the future. Perhaps you’ve 
reviewed your !nances and realised you 
can retire early, or you might decide to 
wait a few more years to help you boost 
your pension pot that bit more.
The key thing to understand is that 
your retirement is completely personal, 
and the amount you will need will 
depend on your specific circumstances 
and expectations. If you’re in any 
doubt about the financial impact of 
early retirement, you should obtain 
professional financial advice. z
Source data: 
[1] Living longer: older workers during  
the coronavirus (COVID-19) pandemic. 
Data source, O"ce for National  
Statistics, May 2021.
13      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
P E N S I O N 
A L L O W A N C E S
Understanding how to make the most of them
Saving into a pension is one of the 
most tax-efficient ways to save 
for your retirement. Not only 
do pensions enable you to grow your 
retirement savings largely free of tax, 
but they also provide tax relief on the 
contributions you make. 
There are various pension allowances 
in place that you need to be aware of and 
understand how to make the most of 
them. These limit the amount of money 
you can contribute to a pension in a year, 
as well as the total amount of money you 
can build up in your pension accounts, 
while still enjoying the full tax benefits.
PENSION LIFETIME ALLOWANCE 
All your pensions, including workplace 
pensions, count towards the pension 
Lifetime Allowance (LTA), with the 
exception of the State Pension and most 
overseas pensions. The standard pension 
LTA for the 2022/23 tax year £1,073,100.
You don’t pay the tax charge until you 
take your pension savings over and above 
your pension LTA (or reach age 75, or on 
death before 75, if earlier). The charge is 
only on the excess money saved in your 
pension that is above your pension LTA. 
NON-TAXPAYER OR EARNING 
LESS THAN £3,600
If you have no earnings or earn less than 
£3,600 a year, you can still pay into a 
pension scheme and qualify to receive tax 
relief added to your contributions up to a 
certain amount. "e maximum you can 
contribute is £2,880 a year. Tax relief is 
added to your contributions, so if you pay 
£2,880, a total of £3,600 a year will be paid 
into your pension scheme, even if you earn 
less than this or have no income at all.
This applies if you pay into a personal 
or stakeholder pension yourself (so not 
through an employer’s scheme) and with 
some workplace pension schemes – but 
not all. The way some workplace pension 
schemes give tax relief means that people 
earning less than the personal allowance 
(£12,570 in the 2022/23 tax year) won’t 
receive tax relief. This is the same as 
in 2021/22. In the March 2021 Budget, 
Chancellor Rishi Sunak said the personal 
allowance – along with several other tax 
allowances – would be frozen until 2026.
MONEY PURCHASE  
ANNUAL ALLOWANCE
The Money Purchase Annual Allowance 
(MPAA) rules were introduced as an 
anti-avoidance measure to prevent 
widespread abuse of the pension 
freedoms, which commenced from  
6 April 2015. It’s intended to discourage 
individuals from diverting their salary 
into their pension with tax relief and 
then immediately withdrawing 25% 
tax-free.
"e MPAA applies only to money 
purchase contributions and has remained 
at £4,000 since 6 April 2017. If you have 
taken )exible bene!ts which include 
income, such as an ‘Uncrystallised Funds 
Pension Lump Sum (UFPLS)’ or )exi-
access drawdown with income, and you 
want to continue making contributions to a 
de!ned contribution pension scheme, you 
will have a reduced annual allowance of 
£4,000 towards your de!ned contribution 
(money purchase) pension bene!ts. 
ANNUAL ALLOWANCE 
The pension Annual Allowance (AA) 
is the maximum amount of money 
you can contribute towards a defined 
contribution pension scheme in a single 
tax year without suffering an additional 
tax charge. All contributions made to 
your pension by you, your employer or 
any third-party, as well as any tax relief 
received, count towards your AA.
The standard pension AA in the tax 
year 2022/23 is £40,000. A lower AA may 
apply, however, if you are a high earner 
or you have already started accessing 
your pension flexibly.
High earners may potentially 
be subject to the Tapered Annual 
Allowance, while those who have already 
started accessing their pension flexibly 
will be subject to the Money Purchase 
Annual Allowance (MPAA).
CARRY FORWARD
Carry forward is a way of increasing  
your pension Annual Allowance (AA) in 
the current tax year. It is used when your 
total pension contribution amounts for a 
tax year exceed your annual pension AA 
limit for that year.
Carry forward allows you to make use 
of any annual allowance that you might 
not have used during the three previous 
tax years, provided that you were a 
member of a registered pension scheme 
during the relevant time period.
If the total contributions to your 
pension in an individual tax year are 
14      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
more than your total Annual Allowance, 
including any unused pension AA from 
previous tax years, then you’ll have to 
pay an annual allowance charge. 
TAPERED ANNUAL ALLOWANCE
"e Tapered Annual Allowance, or 
pension Annual Allowance, is the annual 
limit on the amount of contributions 
paid to, or bene!ts accrued in, a pension 
scheme before the member has to pay tax. 
"e Tapered Annual Allowance is lower  
than the standard Annual Allowance.
Since 6 April 2020, it will only 
affect people who meet both of the 
following income requirements: your 
‘threshold income’ is above £200,000, 
and your ‘adjusted income’ is above 
£240,000. Anyone who meets the income 
requirements above will see their  
Annual Allowance gradually reduce  
by £1 for every £2 of ‘adjusted income’  
above £240,000.
For example, if your adjusted income 
was £280,000 your annual allowance 
would be reduced to £20,000. This 
‘tapering’ stops at £312,000 of adjusted 
income, so everyone will retain an 
allowance of at least £4,000. 
PENSION TAX RELIEF
The government encourages you to  
save for your retirement by giving you 
tax relief on pension contributions. Tax 
relief has the effect of reducing your tax 
bill and/or increasing your pension fund. 
You can receive tax relief on your 
own pension contributions worth up to 
100% of your annual earnings or £3,600 
if more. Since the tax relief you receive 
on your pension contributions is paid at 
up to the highest rate of Income Tax you 
pay, the higher your rate of tax, the more 
you could receive.
The Welsh Government now has the 
power to set Income Tax rates and bands, 
but has opted to keep these the same as 
England and Northern Ireland for tax 
year 2022/23.
If you live in Scotland, you pay 
Scottish Income Tax to the Scottish 
Government and for earned and  
pension income the tax rates and  
bands are different to the rest of  
the UK (but the same as the rest  
of the UK for savings and  
dividend income). z
THE STANDARD PENSION AA IN THE TAX YEAR 
2022/23 IS £40,000. A LOWER AA MAY APPLY, 
HOWEVER, IF YOU ARE A HIGH EARNER OR 
YOU HAVE ALREADY STARTED ACCESSING 
YOUR PENSION FLEXIBLY.
15      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
P E N S I O N 
L I F E T I M E 
A L L O W A N C E
What to consider if you  
are approaching the limit
If you’ve been diligently saving into 
a pension throughout your working 
life, you should be entitled to feel 
confident about your retirement. But, 
unfortunately, the best savers sometimes 
find themselves inadvertently breaching 
their pension Lifetime Allowance (LTA) 
and being charged an additional tax that 
erodes their savings. 
If you are a high-income earner or 
wealthy individual, you could be putting 
too much into your lifetime pension and 
risk exceeding the pension LTA.
"e government will maintain the 
pensions LTA at its current level until 
April 2026, removing the usual annual 
incremental rises.
"e following questions and answers  
are intended to help you avoid this  
tax charge.  
Q: WHAT IS THE  
LIFETIME ALLOWANCE?
A: The pension LTA is the limit on 
how much you can build up in pension 
benefits over your lifetime while still 
enjoying the full tax benefits. If you go 
over the allowance, you’ll generally pay a 
tax charge on the excess at certain times. 
By pension benefits, we mean money you 
receive from your pension in any form, 
whether that’s a lump sum, a flexible 
income, an annuity income or through 
any other method. This allowance applies 
to your total pension savings, which 
may be in different pensions. 
Q: HOW MUCH IS THE  
LIFETIME ALLOWANCE?
A: In the 2022/23 tax year, the LTA  
is £1,073,100. This allowance has  
now been frozen until April 2026.
Q: WHAT HAPPENS  
IF YOU EXCEED THE  
LIFETIME ALLOWANCE?
A: Once you have either crystallised 
your full LTA in pension benefits or 
on reaching age 75, or death before 
75, if earlier, you will be required to 
pay an additional tax charge on any 
funds above the LTA. 
If you take the funds above the LTA 
as a lump sum, you’ll pay a tax charge 
of 55% (and no additional income 
tax). If you place your excess funds 
in drawdown or use them to buy an 
annuity, you’ll pay an upfront tax 
charge of 25% on the excess funds, and 
then your normal income tax rate on 
any income you take. 
Q: HOW IS THE USAGE  
OF YOUR LIFETIME  
ALLOWANCE MEASURED?
A: Each time you access your pension 
bene!ts (for example, by purchasing 
an annuity, receiving a lump sum 
or establishing a )exible income), this 
is recorded as a ‘bene!t crystallisation 
event’. "ere can be additional bene!t 
crystallisation events when you turn 75 
if you then have uncrystallised funds or 
funds in drawdown, and on death before 
75 if you have any uncrystallised funds 
(but drawdown funds aren’t looked at a 
gain on death). 
Q: IS LIFETIME ALLOWANCE 
PROTECTION AVAILABLE?
A: Two types of LTA protection are 
currently available. 
Individual Protection 2016 requires 
you to have had total pension savings of 
more than £1 million on 5 April 2016. It 
provides you with a personal LTA equal 
to the value of your bene!ts on that date, 
subject to a cap of £1.25m. You can continue 
pension funding but ongoing funding may 
be subject to an LTA charge if above your 
personal LTA. 
Fixed Protection 2016 allows anyone who 
had a pension in place at 5 April 2016 to 
apply for an LTA of £1.25m but you can’t 
have had any pension funding a&er 5 April 
2016 and any future funding will cause FP16 
to be lost.
Q: IS IT POSSIBLE TO AVOID  
THE LIFETIME ALLOWANCE?
A: If you do not have LTA protection and 
you are approaching the limit, there are 
various actions you can consider. These 
include stopping your contributions 
(and, instead, investing your money into 
an alternative tax-efficient environment), 
changing your investment strategy or 
starting retirement earlier. 
Q: WHO DOES THE LIFETIME 
ALLOWANCE AFFECT MOST? 
A: "e LTA a(ects high earners and those 
approaching retirement age the most, 
including those with de!ned bene!t pensions. 
As the value of high earners’ pensions rises 
over the next four years towards a lifetime 
limit that will remain !xed, more and more 
individuals may !nd they need to stop 
contributing to avoid breaching the limit.
Q: WHEN SHOULD YOU SEEK 
PROFESSIONAL ADVICE?
A: The rules around the LTA are very 
complex and making the right decisions 
can feel difficult. Receiving professional 
financial advice will help to identify if 
you have a problem and offer different 
solutions to consider, based on a full 
review of your unique circumstances. z
16      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
A C C U M U L A T I N G  
A  N E S T  E G G
What’s making the retirement 
journey even more di"cult?
The days of working for a single 
employer for your entire career 
and retiring with a comfortable 
pension are largely gone. "e responsibility 
for accumulating a retirement nest egg  
now rests with individuals as opposed  
to their employers.
Saving enough for retirement is 
challenging for many people, but an era 
of changing demographic trends, such as 
increased longevity and delayed marriage, 
can make this journey even more di'cult.
NOT FINANCIALLY STABLE 
ENOUGH TO CONTRIBUTE
New research[1] into the attitudes of 
the over-50s towards their pension has 
uncovered that nearly a half (49%) regret 
not saving into their pension earlier, and 
almost two-thirds (64%) wish they had 
contributed more into their retirement 
savings at an earlier stage.
Just over a quarter (26%) stated that they 
only started paying into their pension a&er 
they turned 30 years old, primarily because 
they did not feel !nancially stable enough 
to contribute any sooner (51%).  Many, 
understandably, prioritised raising children 
(42%) and paying o( their mortgages 
(40%) before putting any surplus cash into 
their pension. However, a third put leisure/
holidays (32%), clothing (21%) and their 
pets (10%) before their retirement income.
‘MODERATE’ STANDARD  
OF LIVING IN RETIREMENT
Almost four in ten (39%) people over 
the age of 50  believe that an income 
of between £10,000 and £20,000 per 
annum in retirement will be enough to 
live ‘comfortably’. This is despite figures 
announced stating that £20,800 per 
annum will only provide an individual 
with a ‘moderate’ standard of living in 
retirement. To enjoy a ‘comfortable’ 
standard of living, the amount would 
need to increase to £33,600 per year.
Just under a quarter (24%) of those 
aged over 50 believe that a personal 
contribution of between 0% to 5% 
of their salary is an ‘appropriate and 
achievable’ level to attain a savings  
pot big enough to support them  
in retirement.
TAKING PROFESSIONAL 
FINANCIAL ADVICE IS KEY
When asked about financial advice, 
worryingly more than 70% of over-50s 
say they have never sought professional 
financial advice regarding their pension. 
Almost a third (30%) say they feel they 
know what they are doing and don’t 
need financial support, whilst 10% say 
they rely on their family and friends 
for support and advice. However, after 
hearing that they could add as much 
as £47,000 to their pension[2] (over a 
decade) by taking professional financial 
advice, half of them say they would.
Pensions are more important to more of 
us than ever before. Automatic enrolment 
has brought pension savings to millions, 
but this was only introduced in 2012 and 
for many, especially those over the age  
of 50, it is perhaps too little, too late.
TAKE STOCK OF YOUR 
FINANCIAL SITUATION EARLY
Hindsight is a wonderful thing and 
life in your 20s and 30s can often take 
over, with children to raise, debts to pay 
and holidays to be had. However, it’s 
important to take stock of your financial 
situation early. You may think you have 
enough spare cash, or that you have years 
until you retire, but most people over the 
age of fifty (64%) wished that they had 
paid more into their pension pot, earlier. 
It’s also important that people are 
realistic about how much they might need 
to live on in retirement. With more people 
continuing to pay rent or mortgages a&er 
they !nish working[3], it is unlikely that  
an income of between £10,000 and 
£20,000 per year will be su'cient to  
have a ‘comfortable’ lifestyle. z
Source data: 
1,034 UK adults over the age of 50  
(retired and non-retired) interviewed 
between 31.01.2022–07.02.2022
[1] https://www.retirementlivingstandards.
org.uk/news/retirement-living-standards-
updated-to-re&ect
[2] https://ilcuk.org.uk/#nancial-advice-
provides-47k-wealth-upli'-in-decade/
[3] https://www.bbc.co.uk/news/
business-42193251
17      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
C H A N G I N G  
L A N D S C A P E
No longer a one-size-#ts-all approach 
to retirement planning
The changes in the retirement 
landscape mean that many 
people today are having to adjust 
their outlook towards retirement. With 
more people living longer, expectations 
of retirement are being reshaped and 
there is no longer a one-size-fits-all 
approach to retirement planning.
To different people, retirement means 
different things. Retirement offers the 
gift of time to do the things that matter 
most, whether that's looking to continue 
to work in one capacity or another, 
embark on a new project or business 
venture, or stop work entirely.
Retirement is a very personal stage 
in all of our lives and it may also affect 
others, so it’s important to consider 
loved ones. Over the course of someone’s 
retirement, there may be a change to 
their family situation, including changes 
due to death or divorce, or perhaps 
welcoming new partners and  
possibly grandchildren.
RIGHT CHOICES 
If you are approaching retirement age, 
it’s important to know your pension is 
going to !nance your plans. But what 
questions should you be asking about your 
retirement? Will I be able to retire when I 
want to? Will I run out of money? How can 
I guarantee the kind of retirement I want? 
Should I invest my retirement savings?
These are just some of the questions 
you’ll want to know the answers to. But 
there are many other things to consider 
as you approach retirement. It’s good 
to start by reviewing your finances to 
ensure your future income will allow you 
to enjoy the lifestyle you want. Making 
the right choices now could make a big 
difference to how much money you have 
in the future.
18      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
PENSION SAVINGS 
Retirement might seem a long way off 
but the later you leave planning for it, 
the less chance you have of achieving the 
retirement you want. We all dream of 
how we’ll spend our retirement but that 
dream looks different for everyone.
Some people want to spend more  
time with their family, while others  
want to enjoy long holidays and see  
the world, or simply wish to be 
financially independent. No matter  
what your dreams are, they rely on 
having sufficient pension savings to 
achieve them and live comfortably.
RETIREMENT GOALS
People who associate con!dence with 
retirement are most likely to have speci!c 
retirement goals and know what steps 
they need to take to reach them. But  
sadly, some people don’t feel con!dent 
that they will have enough savings to  
live comfortably a&er they retire.
Some people may have a fear of outliving 
their money, and may not have a clear idea 
of how much money they will need during 
retirement. It’s important to remember that 
retirement doesn’t happen at a certain age, 
it happens when you have enough money 
to live on. And having this clear direction 
and understanding will give you peace of 
mind that you’re on the right track.
DO YOU FEEL CONFIDENT 
ABOUT YOUR RETIREMENT?
Pensions can seem complex and 
overwhelming, and there are many 
reasons you might lack confidence  
in your retirement plans:
   You might be worried that you’re not 
saving enough, but don’t feel you can 
afford to save more.
   You might feel ready to retire now, but 
you’re not sure if you can rely on your 
current pension savings to provide. 
enough money for the rest of your life
   You might have experienced a change 
to your financial situation, including 
life events such as divorce, and have 
new concerns about whether you  
can save enough.
   You might have previously felt 
confident about your retirement  
plan, but the COVID-19 pandemic 
has derailed your savings. 
CREATING A FINANCIAL PLAN 
THAT’S UNIQUE TO YOU
A positive retirement experience begins 
with a plan designed to help you live life 
on your terms. People who know where 
they’re going and how to get there feel 
more confident in their retirement plan. 
We’ll be able to answer these key questions.
WHAT DO I NEED TO KNOW?
   How much you need to save  
for retirement
   How to save tax-efficiently  
for retirement
   How pensions work
   "e type of pension you should choose
   The right amount to contribute  
to your pension
   How to boost your pension pot
   How your pension should be invested
   How to withdraw money from  
your pension
AFTER WE’VE LEFT THE NINE-
TO-FIVE BEHIND
We all have our own idea of the life we’d 
like to lead after we’ve left the nine-to-
five behind. Whatever retirement looks 
like for you, it’s important to make the 
right plans now, so that you have the 
freedom to enjoy the time when it  
comes, however you choose to fill it.
We will ask questions about your 
finances, personal circumstances and 
retirement goals, and create a plan that’s 
unique to you and will help you reach  
the retirement you’re aiming for. z
19      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
B U I L D I N G 
U P  Y O U R 
P E N S I O N  P O T 
Plan to live your best life in later life
The question, ‘Have I saved 
enough to retire?’ is a difficult 
one. It requires a lot of 
information about you, your family,  
your income needs in retirement,  
and an understanding of the various 
financial vehicles available for saving  
and investing before it can be  
answered definitively.
It’s hard to know exactly how much 
you’ll need in later life because everyone 
has different circumstances and different 
expectations. But by planning how much 
you’ll need, and working out how best to 
build up your pension pot, you’ll be in 
a better position to live your best life in 
later life.
Most people know they should save 
money to fund their retirement. But 
they may not know, however, how much 
money they should be saving in order  
to retire comfortably. So what should  
you consider?
Q: WHAT WILL MY LIFE LOOK 
LIKE WHEN I RETIRE?
While this might seem obvious, it’s 
easy to forget about all of the little 
details when thinking about retiring or 
what your daily life will look like after 
retirement. Your budget is aimed at 
having a certain standard of living now, 
while working. Will that standard of 
living carry over into your retirement 
years? Will you need to scale back? Or 
will you be able to enjoy more of the 
finer things in life after you retire?
Q: HOW MUCH AM I CURRENTLY 
SAVING TOWARDS RETIREMENT 
EACH MONTH OR YEAR?
This is always a good metric to know 
how well your current savings are 
holding up, especially since you can 
compare it with other metrics later 
on. Saving early means your money 
is invested for longer and has more 
time to grow – and any returns your 
savings make are also reinvested and 
have a chance to grow too. If you 
know how much money is being put 
away for retirement now, it’s easier to 
estimate how long it will take before that 
particular goal has been reached.
Q: HOW WOULD MY DAILY  
LIFE CHANGE IF I HAD LESS 
INCOME COMING IN?
By looking at your current income 
and expenditure, you can start to get 
a picture of what life would look like 
with a smaller income. Your expenses 
will likely decrease as you retire if it’s 
only necessary to pay for the essentials, 
such as housing, food and utilities. You 
may be able to save more or spend more 
on things that make you happy (within 
reason). If most of your lifestyle doesn’t 
change much after retirement, chances 
are that you’re doing all right with your 
savings. But be mindful that people are 
living longer than ever, and that will 
create some challenges for retirees.
Q: HOW LONG WILL MY MONEY 
LAST IN RETIREMENT?
This is where it starts getting 
complicated because there are several 
questions involved: How much money 
do we plan to live on each month (that 
includes any and all expenses)? How 
long will that money need to support us? 
and How much income do we expect to 
have throughout retirement? It may take 
several years of research, but being aware 
of your ‘magic number’ for retirement 
is a good way to see how well you are 
doing with saving. Turning your dreams 
into reality will take careful planning 
and budgeting. Once you’ve got a good 
idea of your life expectancy, pension pot 
and any other retirement income, we 
can help you make an informed decision 
about when the right time to start your 
retirement is likely to be.
Q: HOW CERTAIN AM I THAT  
MY SAVINGS ARE ENOUGH?
No one has an exact answer as to how 
much money they should be saving 
towards retirement – everyone’s situation 
is different. Knowing your savings 
certainty can help you better understand 
whether or not it’s enough for your 
needs. This metric may require some 
thinking about what type of lifestyle you 
want in the future, what expenses will 
change or go away, and how long you 
might live if nothing changes. Retirement 
can be a long time, so it’s important to 
think about how you plan to spend your 
golden years. The common perception 
is that you’ll need between half and two-
thirds of the final salary you had when 
you were working, after tax, to maintain 
your lifestyle once you retire. z
20      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
L E A V I N G  
W O R K  
B E H I N D
Making an early exit 
from working life
There are many factors that 
can influence when someone 
decides to retire. For some, it 
may be based on health reasons, while 
others may want to take advantage of 
government benefits or simply enjoy 
a more relaxed lifestyle. However, 
one of the most common factors that 
determines when people choose to retire 
is their age.
So, what is the most popular age to retire 
early? Sixty is the most popular age to retire 
early, according to new research[1] which 
reveals the key steps people have taken to 
embrace early retirement and examines 
the costs and bene!ts of doing so.
WANTING TO ENJOY  
MORE FREEDOM 
One in four (25%) are planning to 
celebrate their 60th birthday by leaving 
work behind. With the State Pension  
age currently standing at 66, the 
findings show one in six (17%) people 
who have taken early retirement did  
so when they were 60, making it the 
most common age to make an early  
exit from working life. 
This is also the most popular target 
age for people who intend to retire early 
in the years ahead, with one in four 
(25%) planning to celebrate their 60th 
birthday by leaving work behind. The 
desire to retire early is primarily driven 
by ‘wanting to enjoy more freedom while 
still being physically fit and well enough 
to enjoy it.’
EMBRACING A NEW LIFESTYLE
Nearly one in three people (32%) who 
have retired early or plan to do so gave 
this reason for embracing a new lifestyle. 
Financial security is the second most 
common factor prompting people to 
embrace retirement. More than one 
in four (26%) early retirees say their 
decision was a result of ‘being in a 
financially stable position’ so they can 
afford not to work.
21      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
"e in)uence of money matters is also 
visible in people’s choice of early retirement 
age. One in !ve (20%) people targeting 
early retirement have set their sights on 
55 to make the transition from working 
life. "is is likely to be in)uenced by their 
ability to access their pension savings from 
this age (57 from 2028 unless plan has a 
protected lower pension age).
‘TOO TAXING AND STRESSFUL’ 
Other key factors encouraging people to 
seek early retirement include reassessing 
their priorities and what’s important to 
them in life (23%), wishing to spend more 
time with family (20%) or !nding they are 
either ‘tired and bored’ of working (19%) 
or !nd it ‘too taxing and stressful’ (19%).
"e research suggests the impacts of 
early retirement are wide-ranging and 
broadly positive in many areas of life. 
Most notably, more than two in three 
(68%) people who have retired early say 
their happiness improved as a result. 
In terms of the world around them, 
44% of early retirees say their family 
relationships improved and 34% reported 
improvements in their friendships.
BOOST TO MENTAL WELLBEING 
When it comes to their health and 
wellbeing, more than half report that early 
retirement has delivered a boost to their 
mental wellbeing (57%) and half (50%) 
say their physical wellbeing improved.
However, the findings suggest these 
benefits come at a cost, with nearly half 
of early retirees finding their finances 
worsening as a result (47%). 
Women are the most likely to have felt 
a negative financial impact from retiring 
early (50% vs. 44% of men). Across 
both genders, only 22% feel they have 
benefited financially from their decision 
to retire early.
STEPPING STONE  
TO RETIRING EARLY
Among those people who have retired 
early, one in three (32%) identify having 
a de!ned bene!t (!nal salary) pension 
among the main measures that enabled 
them to take retirement into their own 
hands. "is suggests the concept of early 
retirement may get harder for younger 
generations to achieve, with the majority 
of the private sector workforce now saving 
into de!ned contribution pension schemes.
However, the findings suggest that 
people can still take positive steps to 
make an early retirement possible. 
Paying off your mortgage (30%) is 
identified as the second most common 
stepping stone to retiring early, while 
almost three in ten early retirees (29%) 
say saving little and often was one of 
their main strategies. Nearly one in five 
(19%) say they also saved extra whenever 
they received a pay rise or a bonus 
during their working life.
THE MAIN MEASURES ENABLING 
PEOPLE TO RETIRE EARLY OR 
THINK ABOUT RETIRING EARLY
   32% – Having a defined benefit  
(final salary) pension
   30% – Paying off one’s mortgage
   29% – Saving little and often
   19% - Saving extra whenever  
receiving a pay rise or bonus
   16% – Receiving a redundancy payout
   14% – Receiving an inheritance
WANTING A NEW  
SENSE OF PURPOSE
Among those who take early retirement, 
the research also reveals there is a small 
contingent who have returned to work 
(17%) or envisage themselves doing so in 
the future (15%). Over one in four (27%) 
cite the reason for returning to work 
is because they ‘wanted a new sense of 
purpose’, making this the most frequent 
driver, followed by ‘missing the company 
and social interactions with colleagues’ 
(26%). However, a similar number (24%) of 
early retirees !nd themselves heading back 
to work having experienced !nancial issues.
While happiness soars in retirement, 
many people find their finances take the 
strain when they retire early and money 
worries are one of the biggest factors 
resulting in people returning to work. 
If you aspire to retire early, it’s vital you 
plan your finances to be sustainable for 
the long term. z
Source data: 
[1] https://www.aviva.com/newsroom/
news-releases/2021/12/sixty-the-most-
popular-age-to-retire-early/
22      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
The staggering impact of 
the gender pension gap 
has been revealed in new 
research[1] which shows that women 
have lower pension pot sizes in 
every age bracket, with the situation 
signi!cantly deteriorating as they 
approach retirement. Worryingly, 
women on average retire with less 
than half the income of men.
GENDER PENSION GAP BY PENSION CONTRIBUTIONS
Age
Gap in pension contributions
20-24 
13%
25-29 
16%
30-34
15%
35-39
18%
40-44
23%
45-49
29%
50-54
35%
55-59
40%
60-64
45%
65-69 
49%
M I N D  
T H E  G E N D E R  
P E N S I O N  G A P
On average, women retire with less  
than half the income of men
23      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
REDUCTION IN CONTRIBUTIONS 
PAID INTO PENSIONS
"e amount paid in contributions  
has a big impact on what is received at 
retirement and the di(erence between 
men’s and women’s contribution rates 
is stark. For most people, the e(ect of 
working part-time means a reduction in 
contributions paid into their pension. 
If a person opts to reduce their full-
time working hours to three days a week, 
they might expect their pay and their 
pension contributions to reduce by 40%. 
However, because of auto-enrolment (AE) 
thresholds, the impact could be greater 
than that.
GOOD FINANCIAL PLANNING
A person earning £30,000 opting to 
reduce their hours by 40% would see 
their pay reduce by 40%. However, 
because of the lower qualifying earnings 
threshold (LET) under AE, their pension 
contributions would reduce to around 
50% of their full-time value. A worker 
earning £20,000 would see their pension 
contributions reduce by over 58%. 
Pension contributions are unlikely to 
be a deciding factor when considering 
whether to work part-time. What is 
important is that people understand the 
long-term impact on their pension when 
they are making that decision. "is is 
crucial to good !nancial planning. 
UPPING PENSION 
CONTRIBUTIONS
Some people might consider upping  
their pension contributions, but this 
would have to be carefully balanced 
against disposable income. Another 
option some parents may consider is 
sharing the caring responsibilities to help 
spread the long-term !nancial impact.
One signi!cant change to help women 
in this position would be to remove the 
LET. It has the potential for the biggest 
impact on closing the gender pension  
gap and has been promised by 
government for the ‘mid-2020s’.
HOW TO HELP CLOSE THE 
GENDER PENSION GAP
   If you are working part-time and  
are automatically enrolled into  
a workplace pension scheme,  
consider increasing your monthly 
contributions, if it is a(ordable.
   If you earn less than £10,000 per year, 
speak to your employer about your 
options for joining your company 
pension scheme.
   If you are thinking about reducing 
your working hours to help balance 
family life, you might want to consider 
whether it is better for you or your 
partner to work part-time. As part of 
those considerations, you might want 
to look at which of you gets higher 
employer pension contributions.
   When it comes to saving into a 
pension, starting early allows a small 
contribution to build up over time.
   For those in a long-term relationship, 
have a stake in your !nances. Should 
divorce ever come into the picture, 
keep pensions at the forefront of your 
mind when splitting assets.
   Check your National Insurance record 
to see if you will get the full State 
Pension amount when you retire. You 
need a total of 35 years of National 
Insurance contributions, or, in some 
cases, you can apply for credits. If it 
looks like you might be short, you 
might have the option to pay to !ll  
in the gaps.
   Apply for Child Benefit even if your 
overall household income means you 
need to pay it back through a high-
income Child Benefit charge. If you 
Source data: 
[1] Aviva Workplace Pension Data: 
Percentage di(erence in mean total 
contributions paid in January 2022, men 
versus women, by age group, based on a 
sample of 2,073,000 workplace pension 
plans receiving contributions in the month.
are not working while looking after 
a child you get State Pension credits 
automatically until your youngest 
child is 12 years old as long as you  
are claiming Child Benefit. If you do 
not claim Child Benefit you do not 
receive the credits.
   Talk to your employer about the 
policies they o(er. z
A WORKER EARNING 
£20,000 WOULD 
SEE THEIR PENSION 
CONTRIBUTIONS 
REDUCE BY OVER 58%.
24      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
Source data: 
[1] !e Association of Consulting Actuaries 
2021 Pension trends survey was conducted 
in the summer of 2021 and attracted 212 
responses from employers of all sizes, 
running over 400 di(erent schemes
[2] Aviva Life & Pensions Ireland DAC 
(Aviva), research of the 1,200 people 
surveyed 20.08.21
The consequences of inaction 
on climate change are now 
impossible to ignore. Every 
company has an impact on the world 
around us. And by investing in them,  
so do we.
Increasingly more and more pension 
savers are asking where their funds are 
invested. Many people are no longer just 
concerned about getting the best returns, 
they also want their money to be used in 
a way that helps society and the planet.
CLIMATE RISKS
A survey finds that a third of pension 
schemes have already set targets to 
reduce their exposure to climate-related 
risk[1]. 61% of schemes have considered 
setting a target to reduce their exposure 
to climate risks, but four in ten schemes 
have yet to consider climate risk targets 
and 28% say they will not be setting  
a target.
Of the 33% of schemes that have set  
or are in the process of setting a target, 
half have included an emissions-based 
target with the majority (70%) of these 
being a ‘net zero’ target. 
R I S I N G  T O  T H E  D E F I N I N G 
C H A L L E N G E  O F  O U R  A G E
More pension savers are asking where their funds are invested
PENSIONS INDUSTRY 
UK pension schemes are a massive 
influence on the financial services 
industry, including how the climate-
related risks and opportunities are 
identified, assessed and managed. This 
survey shows that the pensions industry is 
rising to the de!ning challenge of our age. 
In another survey, two-thirds (67%) 
of consumers surveyed believe that it is 
important to consider Environmental, 
Social and Corporate Governance (ESG) 
factors before investing, and this figure 
rises to almost three in four (72%) for 
those respondents with a pension[2]. 
RESPONSIBLE INVESTING
ESG is an evaluation of a firm’s 
collective conscientiousness for social 
and environmental factors. Interestingly, 
females are more likely to consider ESG 
investing at 70.4% than males at 63.9%, 
and its importance is broadly similar 
across all age cohorts. 
While 51% of those with pensions 
would like to increase their investment 
in companies that are tackling climate 
change, some 70% of those respondents 
acknowledged the need to better 
understand the benefits of responsible 
investing, highlighting the fact that there 
is an onus on the industry participants to 
educate consumers in this space.
INVESTMENT DECISION
More than half (53%) of those surveyed 
believe that it is important that a company 
has a positive record of social responsibility 
and good corporate governance, rising to 
60% of those with a pension.
The survey also explored the factors 
that are important to consumers when 
considering investing sustainably. Most 
respondents (75%) indicated that they 
would need good financial advice before 
making their investment decision, rising 
to 78% for those with a pension. 
INVESTMENT RETURNS 
Two-thirds (67%) said they would only invest 
their pension sustainably if the returns were 
the same or better (71% of pension holders), 
and 64% said they would only consider 
doing so if they are not paying higher fees 
and charges (68% for pension holders).
Some 51% of those pension holders 
surveyed said they would like to increase 
their pension savings into companies 
helping to combat climate change, and 
only 20% of all respondents (17% of 
those with a pension) said that investing 
sustainably is more important than 
investment returns. z
25      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
A full and happy retirement is a 
priority for many. But no two 
people are alike. A ’one-size-fits-
all’ system cannot accurately account for 
everyone’s individual lifestyle choices, so 
it makes sense that the way you prepare 
for your future is likely to be different 
from others. 
On the surface, retirement planning 
hasn’t changed all that much over the 
years. You work, you save and then you 
retire. But while the mechanics may be 
the same, today’s savers are facing some 
challenges that previous generations 
didn’t have to worry about.
GOLDEN YEARS 
First of all, life expectancy is longer, 
which means you’ll need your money to 
W I T H  M O R E 
F R E E D O M 
C O M E S  G R E A T E R 
R E S P O N S I B I L I T Y
How much money will I actually need when I do 
eventually retire?
last longer. This is compounded by the 
fact that more companies are moving 
away from defined benefit pensions – 
which guaranteed you a certain amount 
of money in your golden years – to 
defined contribution plans, which are 
more subject to market ups and downs.
So, how can you have the retirement 
you’ve always wanted? Retirement is 
inevitable, but that doesn’t mean you 
have to stop living. Your retirement 
should be a time for enjoying your life 
and the things you most enjoy doing. 
WORKING LIVES 
However, some people are unprepared 
for retirement due to high debt levels at 
the end of their working lives or because 
they were not saving enough during their 
26      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
careers. Sometimes, people are forced 
into retirement through circumstances 
outside of their control.
Some people might choose to live 
off their savings entirely, while others 
may choose to supplement their income 
with rental properties. Still others might 
prefer to have a mix of sources for 
retirement incomes.
PENSION MONEY
Whatever the case, being aware of the 
options available today can help you 
prepare for your future in an e(ective 
way. With the introduction of pension 
freedoms, there is no onus on us to cash 
in our pensions at set ages, and instead we 
can take our pension money any way we 
choose. But, with this freedom also comes 
responsibility, and for some, uncertainty.
Some people find they don’t have a 
clear plan for what they want from their 
retirement, and many underestimate 
how much money they will actually 
need when they do eventually retire. The 
reality is our goals are all very individual, 
but whatever it is you want from your 
retirement, it pays to plan ahead. z
IF YOU HAVE A DEFINED 
CONTRIBUTION PENSION,  
HERE ARE SIX SIMPLE TIPS  
TO CONSIDER:
1. Use pay rises as an excuse to save more.
2. Pay in more when a regular spend ends.
3. Maximise any employer contributions.
4. Invest lump sums you receive.
5. Put off breaking into your pension pot.
6. Be choosy about your investment choices.
27      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
The more old pensions you have, 
the easier it is to end up losing 
one. Tracing pensions from years 
ago can be a hassle. Over 3.6 million 
Britons admit they have no idea how 
many pensions they have and risk  
paying more in fees than necessary, 
according to new research[1].
The number of workers with small 
pension pots of under £1,000 has surged 
dramatically in recent years, as auto 
enrolment has allowed millions of people 
to benefit from workplace pensions for 
the first time.
PAYING FEES TO  
MULTIPLE PROVIDERS
However, with the average employee now 
changing jobs 11 times[2] in their working 
T R A C K I N G 
D O W N 
S A V I N G S 
F R O M  A 
P R E V I O U S 
E M P L O Y E R
Savers paying fees to multiple  
providers across all their pensions
life, people are increasingly building 
up many small pots and are often 
losing track, misplacing paperwork or 
forgetting about previous schemes they 
are invested in.
The Pensions Policy Institute (PPI) 
predicts the number of small pots will 
triple by 2035 to 27 million[3]. Although 
the government’s Pension Dashboard will 
allow people to see all of their pensions 
in one place when it comes into effect 
in a few years’ time, it will not solve the 
problem of savers paying fees to multiple 
providers across all their pensions.
CONSOLIDATE SMALL  
PENSION POTS 
While savers already have the option of 
combining their pensions, one in ten 
(10%) have no idea how to do this, 
while 12% say it’s just too much hassle. 
As a result, more than two-!&hs (44%) 
say they’ve never bothered to track 
down savings from a previous employer. 
Almost three-quarters (72%) of 
Britons now support the introduction 
of a new system that would 
automatically consolidate small 
pension pots as they move jobs, 
reinforcing strong support from the 
industry for the change. This would 
make it easier for people to manage 
and keep track of their retirement 
savings, while making the system 
more efficient and effective for the 
UK’s 33 million[4] pension holders. 
COMPARE THE FEATURES  
AND BENEFITS 
Even if you have not had that many 
jobs, you may still have a number of 
different pensions to keep track of. 
Pensions can be confusing, but there is 
an alternative way to help keep on top 
of them. Pension consolidation may 
allow you to combine some or all of 
your defined contribution pensions  
in one place.
Consolidating your pensions means 
fewer statements to keep an eye on, 
along with fewer and potentially 
lower management charges. However, 
not all pension types can or should 
be transferred. It’s important that 
you know and compare the features 
and benefits of the plan(s) you are 
thinking of transferring. It can  
be a complex decision to work out 
whether you would be better or  
worse off combining your pensions, 
so it’s essential to obtain professional 
financial advice. z
Source data: 
[1] !e research was carried out online 
by Opinium across a total of 5,010 
adults aged 18+. Data is weighted to 
be representative of the GB population. 
Fieldwork was carried out between 12–18 
March 2021. 
[2] https://assets.publishing.service.gov.
uk/government/uploads/system/uploads/
attachment_data/#le/945319/s mall-pots-
working-group-report.pdf
[3] https://www.pensionspolicyinstitute.
org.uk/media/3545/20200723-deferred-
members-#nal-report-for-the- website.pdf
[4] Finder, Pension Statistics 2021
28      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
Following pension reforms from 
age 55 – rising to age 57 from 2028 
unless your plan has a protected 
pension age, you can start using the money 
you’ve saved in your pension. But there’s 
a lot to think about when you withdraw 
money from a pension. 
"ere are some exceptions that entitle you 
to access your pension earlier, but you may 
have to pay high fees. Whatever age you 
decide to withdraw your pension, there  
are a few things you’ll need to consider.
A C C E S S I N G 
Y O U R  
P E N S I O N
5 things you need to consider 
before deciding to withdraw 
money from your pot
TOP 5 THINGS TO CONSIDER 
BEFORE WITHDRAWING  
MONEY FROM YOUR PENSION
1. Pensions freedoms: Familiarise 
yourself with the pensions freedoms  
so you are aware of your options.  
You can now do a lot more with your 
pension pot than previously. Everyone 
 is different and it is important to  
find the right solution for your 
circumstances. What risks are  
you willing to take?
2. Saving requirements: Consider the 
amount of money you will need each 
month to maintain your lifestyle. Ask 
yourself: How much might I need? 
How much might I get? Do I still have a 
mortgage to pay off? What other sources 
of income do I have, and do I need my 
pension to keep up with inflation? Could 
I consider working for longer? Do I want 
to have annual holidays?
3. Costs later in retirement: Think 
about costs later in your retirement. 
What will your living costs be in the 
future? Care needs are not a subject we 
are comfortable thinking about but it is 
important to have conversations about 
it with your family, as well as Powers of 
Attorney, Wills and inheritance.
4. Health and life expectancy: We often 
vastly underestimate this, but evidence 
shows we are mostly living longer, 
with a growing variation in healthy life 
expectancy. If you have a partner, do you 
need to provide for them financially after 
you die, or are you relying on them?
5. Obtain professional financial advice: 
Few of us may expect to give up work 
altogether in our 50s. But a growing 
number of us are dipping into our 
pension before retirement age. Before 
we get into the different ways you could 
withdraw money, there are some more 
general things to think about first. Try 
asking yourself the following questions: 
How long will I need my money to last? 
How long do I want to keep working? 
How much tax might I pay? Could my 
health and lifestyle affect what I get? 
How much do I want to leave behind? z
29      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
Have you ever wondered what 
you need to consider as you 
approach retirement? Whatever 
your concept of what is a good pension 
pot, one certainty is that relying on 
the State Pension alone will not give 
you a good enough pension to live on 
comfortably through your retirement.
‘Will I be able to retire when I want 
to?’ ‘Will I run out of money?’ ‘How 
can I guarantee the kind of retirement 
I want?’ These are hard questions to 
answer unless you obtain professional 
financial advice and why you need to 
start by reviewing your finances sooner 
rather than later to ensure your future 
income will allow you to enjoy the 
lifestyle you want.
After decades of working and saving, 
you can finally see retirement on the 
R E V I E W I N G 
Y O U R  F I N A N C E S 
S O O N E R  R A T H E R 
T H A N  L A T E R
Bolster your retirement lifestyle as you  
approach your planned retirement date
horizon. If you plan to retire within the 
next five years or so, consider taking 
these steps today to help ensure that 
you have what you need to enjoy a 
comfortable retirement lifestyle. 
Taking these actions now could help 
bolster your retirement lifestyle as you 
approach your planned retirement date.
8 THINGS TO CONSIDER AS YOUR 
RETIREMENT APPROACHES
1. TRACK DOWN YOUR PENSIONS
It’s important to track down all the di(erent 
pension schemes you’ve previously paid 
into, so you can be sure you're claiming 
everything you’re entitled to in retirement.
If you’re unsure where to start, the UK 
government offers a pension tracking 
service to help you find lost pensions.
2. WHEN CAN YOU  
ACCESS YOUR PENSIONS?
Since April 2015, pension freedoms have 
given savers in de!ned contribution (DC) 
schemes greater access to their cash, 
allowing )exible withdrawals from the 
age of 55 (rising to 57 in April 2028 unless 
your plan has a protected pension age).
3. WHAT’S YOUR  
PENSION’S VALUE?
"e easiest way to !nd out how much  
your pension is worth is to check your 
pension statements. Whatever type of 
pensions you have, you’ll receive an annual 
pension statement from your provider. 
In it they’ll tell you how much  
your pension is currently worth  
and what it’s expected to pay out  
at your retirement date.
30      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
4. GET A STATE  
PENSION FORECAST
You can call the Future Pension Centre 
and ask for a State Pension statement. 
Your statement will tell you how much 
State Pension you have built up so 
far based on the National Insurance 
contributions and credits that are on 
your National Insurance record at the 
time your statement is produced.
Contact the Future Pension Centre for 
questions about the State Pension or to 
ask for a statement. Telephone: 0800 731 
0175, or from outside the UK: +44 (0)191 
218 3600. Or obtain a forecast online at 
https://www.gov.uk/check-state-pension 
5. GETTING INVESTMENT ADVICE
If you are close to, or at retirement, 
you may want to reevaluate your plans. 
If you have access to other savings 
and investments, you might want to 
consider using these before accessing 
your pension. 
If you have other investments or 
savings, such as Individual Savings 
Accounts, stocks and shares, bonds, 
funds, property, etc, it’s worth 
checking their value as you approach 
retirement age as they can support  
you in addition to your pension.
6. HOW WILL YOU  
ACCESS YOUR PENSION?
When it comes to deciding how to 
use your pension pot, there’s no one 
‘right answer’. There are more pension 
options than ever thanks to the pension 
freedoms that allow savers access to 
every penny of their retirement savings.
Your options may include taking a 
regular income or lump sums and keep 
investing the remainder in the stock 
market, or cashing in the entire amount. 
You can also choose to swap the money 
for a guaranteed income via an annuity.
 
7. HOW IS YOUR  
PENSION INVESTED?
Pensions may be for the long term,  
but it’s important regularly to review 
where your money is being invested.  
You need to keep a close eye on which 
funds your retirement savings are in so 
that you can check you’re comfortable 
with the risks involved. 
You should also keep a close eye  
on how much you’re being charged,  
as fees can have a big impact on the 
amount you end up with at retirement.
8. THE BENEFITS OF ADVICE
Pension advice is important because 
pension products can be complicated, 
and life can be unpredictable. 
Professional financial advice will  
help you make the right decisions  
about your money and your future. 
Retirement planning is important 
because it can help you avoid running 
out of money in retirement. You need 
to know how much you’ve got, how to 
access it and when you can afford to 
retire comfortably. z
31      |      GUIDE TO MAKING THE MOST OF YOUR FUTURE
The content of this guide is for your general information and use only, and is not intended to address your particular 
requirements. The content should not be relied upon in its entirety and shall not be deemed to be, or constitute, advice. 
Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such 
information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or 
company should act upon such information without receiving appropriate professional advice after a thorough examination 
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value of your investments can go down as well as up and you may get back less than you invested. Content based on our 
understanding of the current 2022/23 tax laws and HM Revenue & Custom’s practice.
TIME TO BUILD THE 
WEALTH YOU NEED, TO 
ACHIEVE THE RETIREMENT 
YOU DESERVE?
Talk to us about how we can help you  
make sure you can afford the standard of  
retirement you deserve. 
To find out how we can help you – please contact us.
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