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IT CANNOT BE WITHDRAWN UNTIL YOU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
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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
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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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