Ready to retire? Understanding your choices
At aged 50, retirement could be as little as five years away. But whether you’re planning to retire then, or in many years’ time, we’ve put together some things you might want to think about.
Your questions answered
Start by working out how much you already have in savings, investments and pensions to put towards your retirement. Your pension provider or administrator should be able to give you an up-to-date statement of what your pension could be worth at the retirement age you originally selected. You can also find out what State Pension you’re entitled to.
On average, £24,000 a year is the golden number when it comes to planning for a comfortable retirement.* Our pension options calculator lets you see how much your pension could be worth, which can help you to decide when the time is right for you to retire.
- When you decide that the time is right to take your money out of your pension, you can:
- Turn it into a regular taxable income (annuity), so you can always be sure of what you’ll get.
- Take lump sums (25% tax free) and taxable income from your pension pot as and when you need and leave the rest invested.
- Take your whole pension pot as a cash sum of which 25% would be tax free but the remaining 75% is taxed along with any other income you may receive.
- Leave it where it is and continue saving.
Our handy comparison table (PDF, 55KB) helps you consider which option is right for you.
There’s more flexibility about when you retire than ever before. Generally speaking, if you’ve saved into a workplace or private pension, once you reach 55, you can start taking your money out, but you can also choose to leave it where it is and let it grow a bit more.
As well as financial considerations, other issues may affect your decision, for example, whether you enjoy your job and can physically manage its demands, and your health. You may even find that a phased approach works best for you, reducing your hours from full to part-time.
On average, a person has 11 different jobs over the course of their working life.* If you’ve been part of a pension scheme at each job, that means you could have pension pots all over the place. Combining some or all of your pension funds may be worth looking into.
Need expert advice on retirement?
If you’re not sure if you’re on track for the retirement you hope for, then our partner Schroders Personal Wealth could help. They provide personalised advice on a range of products and services. It all starts with a free, no obligation chat, then a financial plan that’s tailored to you.
Eligibility criteria applies. Fees and charges may apply.
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