Moving into retirement

For us, the first step when you’re making the move to retirement is to think about what you want from your life in the years ahead. Maybe you’d like to move house, upgrade your car or travel more frequently. Then there’s how you use your day. Perhaps you’ll still work part-time (which means some extra income coming in), volunteer, take up a new hobby or dedicate more time to an existing one.

Having a picture in your head can make it easier to work out what your retirement might cost – and if you’d like some help getting started, try our  retirement calculator.

Your pension is just one part of your retirement income picture (though, for many people, it is a pretty big part). You might also have ISAs, other investments, rental income from a property and so on.

It can take a bit of time, but there are two good reasons to work out everything you have. First, it can make your plans a lot more effective, as you’ll have a much better idea of what you can achieve. Second, you may well find that you have more than you think, which is always a nice surprise – and it may mean you can do more than you expected with your retirement.

Thanks to a change in the pension rules a few years ago, there are now several ways you can access your money. Some of them have complicated names (we’re thinking of the Uncrystallised Funds Pension Lump Sum or UFPLS, in particular) and the way they work isn’t straightforward either. If you’d like to know more you can  read a quick overview or download our retirement income guide if you want the full details.

While many people move pensions around during their working lives, some don’t realise that there are good reasons to do this just before they retire as well. For a start, if you’ve changed jobs a few times, it’s likely you’ll have several schemes in different places. Bringing them together can make it much easier to plan – and help you look after your money in the years ahead as well.

Equally, it could open up more investment options or more types of retirement income, as some companies don’t offer the full range. It might even save you money as costs can vary significantly between providers – and over a long retirement, small changes in price can lead to a big difference in how much you have.

Take our SIPP for example. It offers funds from over 140 investment companies (many more than most workplace pensions can offer) and we provide the full range of retirement income options. It’s affordable too, as our typical low-cost service fee is just 0.35% (dropping to 0.20% when you have more than £250,000 with us). Other than that, you just pay the charges associated with your investments. We don’t even charge for setting up drawdown – which can be a big saving over some companies’ costs.

After your house, your pension could be the single biggest asset you have. Unfortunately, this makes it a target for scams. There are lots out there, and some can seem very convincing, but the usual rules of thumb apply. If something seems too good to be true, it probably is and you should never act on anything without checking it thoroughly first (particularly when someone contacts you without you asking them to). 

Big decisions need more thought, but that doesn’t mean you have to do everything yourself. We provide helpful guidance on our website (including the tools we’ve already highlighted), plus we have a team of dedicated retirement specialists who can give you free guidance or paid-for advice. The team is there to help you make the most of your money.

Find out about the difference between guidance and advice – and learn more about how our team can help you with your income decisions.

We also recommend the Government's Pension Wise service which offers free impartial guidance to help you understand your options at retirement. You can access the guidance online at www.pensionwise.gov.uk or call them on 0800 138 3944.

After years and years of saving, there can be a strong temptation to start enjoying the money you’ve put aside. However, some decisions can’t be reversed – even if you quickly realise that they weren’t right for you. Taking the time to do some research, and speaking to a specialist if you need to, can make a world of difference to your income in retirement.