Take your time

Don’t forget, hasty decisions about your pension savings could have a big impact on your future.

Pensions are invested, so can be affected by major changes in the markets. Sometimes, it might be best to wait before you access your pension savings, as you might miss out on any increases in value if markets recover – but please remember values can go down as well as up. Even though you’ll see a selected retirement age in your account, you don’t have to take your money from that age – it’s just the age we think you might want to retire. It’s a good idea to focus on your needs in the long term rather than on current events, and to take advice before making decisions.

If you’re experiencing financial difficulties, it’s worth exploring any other savings you might have before taking some (or all) of your pension savings and looking at what other sources of support are in place. More information can be found on the MoneyHelper website. MoneyHelper also has a debt advice locator tool to help you find out where you can go to get free debt advice.

What lifestyle will you want?

If you want to continue enjoying life like you do now, you need to save towards it.

To start, it’s useful to know what your own outgoings will be so you can estimate how much you’ll need in retirement. This could be anything you regularly spend money on such as housing, transport, food, insurance, healthcare, entertainment, gifts and clothing.

And if you’re not sure what your outgoings might look like, our retirement planner can help. We use the Pensions and Lifetime Savings Association’s Retirement Living Standards to give you an idea of what certain goods and services would cost at 3 different lifestyle levels. These are minimum, moderate and comfortable.

Access your account to get started with the retirement planner.

How long will your money need to last?

This depends on when you decide to give up working or reduce your hours. Keep in mind, your pension and other savings will need to last for as long as you do. And longer if you’re providing for a loved one.

At The People’s Pension, you can pass on anything that’s left from your pension savings to a loved one – or to several people, a charity, a company etc. You can do this by nominating them as your beneficiary in your account.

If you retire at 65 today, you can expect to live for roughly another 20 years.* Of course you might live much longer than this. Our life expectancy calculator can give you an idea.

^{*According to the Office for National Statistics.}

Planning for inflation

Inflation is the changing cost of household items. Over time, inflation will push prices up, which means that your pension won’t buy as much as it did before. So, in 20 years’ time, you’ll need more money than you do today to buy the same goods and services.

Our retirement planner considers inflation to reduce the projected value of your pension, to give you an idea of what its value could be in today’s money.

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Sources of retirement income

Once you know how much you might need to live on when you retire, our retirement planner can help you to work out if you’ll have enough income to cover your costs in retirement.

View the retirement planner in your account.

When it comes to your retirement income, you may also want to think about…

When it comes to retirement income, you may also want to think about…

Ways to boost your retirement income

If you think your retirement income could fall short of your expected outgoings, there are plenty of ways you can boost it.

Increase regular contributions

Adding to your regular pension savings by even a small amount can add up over the years. This is because if you increase your pension contributions, you should get more tax relief from the government and your employer might contribute more too. Also historically, in the long run, the return on your savings has shown to be better than from any savings in your bank account.

Add lump sums

Maybe you’ve had a bonus or an inheritance – it’s good to consider investing it into your pension pot. The more you pay in the more tax relief you may receive and the more money you could have later in life.

Combine your pensions into one

If you have several pensions with different providers, it may be a good idea to combine them into one pot. This will make it easier to keep track of your overall savings. You could also pay less in charges with just one pot.

Before you transfer, check what type of pension you have. Final salary schemes, or defined benefit schemes, are usually best left where they are as your retirement income is already agreed and so transferring may mean you lose this certainty.

Other schemes, such as defined contribution schemes can be transferred. Some schemes charge you to transfer, so check first if this is the case.

If you think you might have lost track of a pension, discover how to find a lost pension.

Retire in later life

You no longer have to retire when your employer tells you to, or even when you start taking your State Pension.

So, if you think you can’t afford to retire, you don’t have to. You can continue working full time or part time and carry on contributing to a pension pot to create more income. The longer you defer taking your pension, the more time it has to potentially grow.

You can also defer taking your State Pension.

If you decide to retire later – you can change your retirement date in your account.

Please note, once you’re over age 75 any contributions you make into your pension won’t receive tax relief.

Generate additional income elsewhere

If your pension income falls short, there are other ways to generate an income elsewhere.

For example:

• Part-time work
• If you own your home, rent out a room or even your driveway
• Make money from a hobby
• Set up your own business
• Downsize your home
• Move to a cheaper area

Of course all these options will have their pros and cons. Bear in mind the tax implications of generating extra income and how much it costs to set up a business or move home. And if you move, always keep your address updated in your account.

Retirement countdown

Kicking off 15 years before you plan to retire, our timeline gives you a checklist of what you should be considering at each stage.

Get ready for retirement

Getting organised to take your money may take a while so give yourself plenty of time. Below are a few key things to get you started.

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