Approaching retirement - when to retire and what you need to do
As you approach retirement, you’ll need to check your personal, company and State Pensions. You must make sure you have enough income to provide for your needs in the future. Find out when you can retire and where to get help with checking your pensions, savings and investments.
When you can retire – your options
You will need to decide when you want to retire. You can choose to work past your State Pension age, which is the earliest age you can get your State Pension. Or you can take early retirement and stop working before your State Pension age.
Working past your State Pension age
If you work past your State Pension age you can choose to either take your State Pension or put off claiming it. There are benefits to putting off, or deferring, your State Pension. You could earn extra State Pension paid each week with your State Pension if you put off claiming for at least five weeks. Or you could earn a lump sum if you put off claiming your State Pension continuously for at least one year.
If you want to continue working but want to reduce the hours you work, then you could consider working part-time.
Find out what your State Pension age is, about the possible benefits of working longer and how to request working past your State Pension age.
- Calculating your State Pension age
- State Pension deferral - taking up your State Pension later
- Working part-time after you retire
- Requesting to work past retirement
- Working to suit you
Stopping work before your State Pension age
If you are considering stopping work before your State Pension age, or taking early retirement, this may affect your State Pension.
The amount of State Pension you get depends on how many qualifying years of National Insurance contributions you have over your working life. See ‘State Pension and Pension Credit – what you need to check’ below to make sure you qualify for a full State Pension.
Retiring early may also affect your personal or company pension. The rules for personal and company pensions vary, depending on who provides them. You will need to check your personal or company pension to see how early retirement might affect your situation.
Read more about how stopping work before you reach your State Pension age can affect your pensions.
Checking your income before deciding when to retire
When deciding when to retire the most important thing to consider is making sure you have enough money to live comfortably. It is useful to work out how much money you will need and how much income you are likely to have when you retire. To help you plan your income in the future you should check your:
- personal or company pension
- State Pension and Pension Credit
- savings and investments
Personal or company pension – what you need to check
You should check your personal or company pension, as you approach retirement, to make sure you have enough income for your future retirement. How much your personal or company pension is worth depends on how much has been put in and how well it has been invested. The provider of your personal or company pension will tell you how much you have.
Find out when you can take your personal or company pension, how you can receive it and where you can get further advice.
- Options when you take your company pension
- Options when you take your personal pension
- Stakeholder pensions
Trace your pension
If you have lost the details of your personal or company pension provider, then the Pension Tracing Service may be able to help.
State Pension and Pension Credit – what you need to check
You can check how much State Pension you are likely to get when you retire. You can read about changes to the State Pension and use the State Pension profiler to get a rough estimate. Or get a full State Pension statement based on your National Insurance contributions record. If you don’t qualify for a full State Pension then you can consider topping it up.
Topping up your State Pension
Your State Pension may need topping up if you don’t have enough qualifying years for the full basic State Pension. Find out why you might need to top up your State Pension and how to make up any shortfall.
If you are on a low income then you may be entitled to Pension Credit. Find out if you are entitled to Pension Credit.
Savings and investments – what you need to check
It is worth checking your savings accounts to make sure you are earning a competitive rate of interest. If you are not, then you may want to look at moving your savings to another account.
Some savings accounts are particularly helpful when boosting your income in retirement, for example, savings accounts that pay interest to you monthly. Look at ‘Savings and investments’ to find out more about different ways to save and invest your money.
If you are not sure what type of savings account suits your needs then financial advisers or the Pensions Advisory Service can offer help and advice. Find out about financial advisers and what advice they can give you on your savings and investments.
- Choosing and using a pensions adviser
- Free financial advice
- Savings and investments
- Pensions Advisory Service (contacts section)
Health and lifestyle
As well as considering your finances as you approach retirement, you also need to think about taking care of your health. By taking some small steps to keep healthy and active now you can increase your chances of enjoying a healthy, independent life in the future.