Plan your retirement with confidence
Retirement can sometimes feel like a big leap, but it’s really a series of manageable stages. Take control of your journey with our key steps for retirement planning.
1. Look at your sources of retirement income
Your pension’s main purpose is to provide you with an income in retirement, so it’s important to identify all potential sources of money.
Start by checking how much you’ve already saved and how much you’re adding each month by logging into your account, online or via our app.
Your State Pension will be in addition to your workplace pension. The full rate of the new State Pension is £230.25 a week. You can see when you’ll reach State Pension age and check the amount of State Pension you’re likely to get on the government’s website.
You might have workplace pensions you’ve forgotten about, and you wouldn’t be alone! Research suggests there are 3.3m lost pensions in the UK worth £31.1bn overall. Use our pension finder (found in your online account within the transfer-in section) to help you find your old workplace pensions.
Make sure you’ve got up-to-date information about all your bank or building society savings, ISAs, Premium Bonds and investments. If you think you’ve lost track of some money, trace your lost accounts and savings with MyLostAccount, a service created by the UK bank and building society sector.
When you get older, you become eligible for benefits such as a free bus pass, free NHS prescriptions and eye tests. Depending on your age or income, you may also qualify for Winter Fuel Payments or Pension Credit.
Read more about benefits in retirement on MoneyHelper’s website.
It’s worth noting, when you take your pension money, you might have more income overall, which could affect what government benefits you can get.
2. Think about when you plan to retire
Most people stop working and start taking their pension money in their mid-60s. The age you can normally access your pension is 55 (rising to 57 in 2028). But you don’t have to take your pension money just because you can – after all, it’ll need to last as long as you do. If you’re still working, you could leave your pension savings invested, giving it the chance to grow.
If you have a serious health issue, taking your pension sooner may be the right choice for you. Read more about taking your pension money earlier due to ill health.
3. Work out how much you’ll need each month
To work out how much you’ll need and could have in future, think about the retirement lifestyle you want to have. Our retirement planner can help with this.
Before finalising your month-to-month plan, you’ll need to choose how you take your pension money. Options can include taking your pension all at once or as a monthly income. The option and amount you choose to take from your pension could impact the tax you pay. Learn more about how you can take your pension money.
Account for inflation in your retirement planning
Over time, inflation pushes the prices of household items up, so your money won’t buy as much as it did before.
For example, in 2000 the average price of a loaf of bread was 51p. That same loaf now (January 2025) would cost £1.40*. So, in 20 years’ time, you’ll need more money than you do today to buy the same goods and services.
Let our retirement planner help you factor in inflation. It considers the effect of inflation and gives you an estimate of your future pension savings in today’s money.
* Source: RPI: Ave price – Bread: white loaf, sliced, 800g – Office for National Statistics (ons.gov.uk)
4. Increase your pension savings
You might find a gap between the amount of money you want to have in later life and the projected income your provider estimates you could get. Topping up your pension could help make up the difference.
It's usually simpler to ask your employer to increase your pension contributions, and they may even match any extra money you pay in. Or, you can make a personal payment, either as a one-off addition or by setting up a regular monthly amount via Direct Debit. You can do this by completing our personal contributions form.
Other ways to top up your retirement income
Think about the bank or building society savings you have – could that money grow more in your pension? If saving for retirement is your goal, remember your pension is invested, not just left to accumulate interest.
Making your own investments, such as in company shares, could also help provide an income – but managing the risks can be difficult. Your workplace pension is professionally invested for growth, so everything is done for you.
Working part-time in retirement, sometimes called ‘semi-retirement’, is another option for sustaining an income in later life. If you’re thinking about this, keep an eye on your total income. Making more money might push you into a higher tax band, meaning you pay more tax.
5. Get ready to take your pension money
Put your plans into action with our pension-ready checklist:
- Check the basics. Log in to your account to check your personal details and customer number. You can also updated how your money is invested and choose who you’d like to receive it if you died (your beneficiaries).
- Do your research. Read more about what you could do with your pension money and compare all your retirement options.
- Get impartial guidance and advice. Find out more about the financial advice and free unbiased guidance you can get to help make decisions.
- Combine pension savings into one. Consider bringing your savings together to make them easier to manage – it could even save you money.
- Work out how much tax you might have to pay. Learn about how tax works when you take your pension money and what to look out for.
Beware of pension scams
Pension scams might seem to be legitimate businesses or government-backed companies. Learn more about how to spot and avoid pension scams.
