Retirement checklist

Greater flexibility around how you use your pension savings, may open up exciting new possibilities for your future. Our checklist can help you ensure your planning is on track. Are you retirement-ready?

You've got a whole world of options when it comes to what to do with your pension in retirement.

When you reach age 55, if you have a 'defined contribution' pension, you can take your money as cash or, as a guaranteed income (also known as an annuity), or through a flexible cash or income plan (also known as drawdown). You can also opt for a combination of options depending on your provider – or leave your pension pot where it is if you don’t need it just yet.

Each option has its own upsides, downsides and tax implications. The amount you pay will be based on your circumstances and your tax situation at the time you take your pension savings. The good thing is that you can normally take the first 25% or your money tax-free.  So before you decide which option is right for you, check to see what the tax implications are.

If you are a member of an 'occupational pension scheme' or have a 'defined benefit' pension, the options available to you may vary, so please check with your provider.

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Your pension, your freedom

You can now access your pension in more ways than ever before, after the government introduced wide-ranging changes in April 2015.

This is great for you and your retirement. You just need to decide which option is best for you. We’ve put together this video, to help you along the way.

Having trouble playing our video? Please view here.

Cashing in your pension

It might seem like a far off prospect but knowing how you can access your pension pot can help you understand how best to build for the future you want.

The key thing to know is that from the age of 55, if you have a defined contribution pension, you have the choice how to take your pension.

 You've got a whole new world of options when it comes to what to do with your pension in retirement.
You've got a whole new world of options when it comes to what to do with your pension in retirement.

Lots of choice can often mean increased confusion, so here’s an at-a-glance view of your options. We’re not recommending one over the other, but we can support you when the time comes to make your decision.

(For a more in-depth view of each of the options, with examples and numbers, you can also explore our Approaching retirement section.)

Each option has its own upsides, downsides and tax implications. It depends on what you want out of life, how you choose to live and how much you want to leave behind.

With all of the options, you can normally take up to 25% of your pension pot as a tax-free lump sum if you wish to do so. The rest will be taxed as an income as and when you receive it, so look at the tax implications of each option carefully.

So what are your options?

1. Get a guaranteed income for life (also known as an annuity)

You can use your pension pot to buy an income for life. It pays you an income and is guaranteed for life. These payments may be subject to income tax.

In most cases you can take up to 25% of the money you move into your guaranteed income for life, in cash, tax-free. You'll need to do this at the start and you need to take the rest as an income. Check out these annuity tips before you buy.

2. Take flexible cash or income (also known as drawdown)

In most cases you can take out up to 25% of the money moved into your flexible cash or income plan, in cash, tax-free. You'll need to do this at the start. You can then dip into the rest as and when you like. 

You can also set up a regular income with this option. Any money you take after the first 25% may be subject to income tax. You can invest the rest in whichever fund or funds you choose, giving your money the chance to grow. Although as with all investments, it could go down in value too and you could get back less than you put in.

3. Take your money as cash

You can do this all in one go, or as a series of smaller lump sums, whilst the rest remains in your pension fund.
 
If you opt for smaller lump sums without taking your tax-free cash up front then each payment will be 25% tax-free. The remainder will be added to your income for the year and taxed accordingly.

This may result in you paying a higher rate of tax.

4. A combination of options

You don’t have to choose one option – you can take a combination of some or all of them over time, even if you’ve only got one pension pot.  

Before combining any options though, take time to think about the benefits and considerations of each option on its own. Check with your providers to see that you’re not losing out on any guarantees on your plan by combining options.

5. Leave it where it is

If you don’t need to take any money out, you can leave it in your pension pot to give you more time to decide what to do with it, or give your pot a chance to keep growing - but while it’s invested, it could go down as well as up in value and you might get back less than you put in.

And if you’re still paying into your plan you can keep paying into it and potentially benefit from tax relief. You can then choose how to access your money, when the time is right for you.

If you do decide to do nothing, we would recommend you review your terms and conditions or speak to your provider.

Some other things to think about

When deciding what to do with your pension pot, it’s important to remember that each option might have different tax implications and pension providers offer different products with alternative options or features (including the product terms, rates, funds or charges) that might be more appropriate for your individual needs and circumstances.

This is why it’s important you should shop around – so that whatever you decide to do – whether that’s a guaranteed income for life (also known as an annuity), flexible cash or income (also known as drawdown) or something else, it’s the right decision for you.

For some products, like annuities, it’s important to shop around so you can get the highest possible income. Yours or your partner’s health and lifestyle can increase the amount of income you or your partner can get. Different providers might use different criteria to assess yours or your partner’s health and lifestyle conditions. 

This is known as an enhanced annuity. Prudential do not offer enhanced annuities but you might qualify for an enhanced annuity with another provider and get a higher income. That’s why it’s very important that you should shop around.

We recommend you use Pension Wise, a free, impartial guidance service offered by the Government to help you understand your retirement options. You can speak to them on 0800 280 8880, and book an appointment to meet someone in person. You can also speak to a financial adviser.

If you're a member of an occupational pension scheme, the options available to you may vary, so please contact your scheme administrator. We always strongly recommend that you take financial advice. If you have a pension with guaranteed benefits of £30,000 or more and are looking to convert it to a flexible option such as taking the whole pension as cash or a flexible income, you may be required by legislation to show us evidence that you’ve taken advice before we can progress your request.

In addition, if you want to transfer out of a defined benefit scheme you are also required to take financial advice.

Now that you have more choice over how and when you access your pension; check to see how much you could get from each of the options. If you are aged 55-85, our Retirement Income Calculator will provide an example of what you could get. Results are based on your age, pension pot size today, generic rates and current tax information. What you actually receive will depend on circumstances at the time you come to take it. 

If you’re an existing customer, it’s best to contact us and we can talk you through your options and what your pension pot could provide based on our rates. 

We also have a range of other online tools to help with your planning, and products for when the time comes. Take a look at our online tools below.

Modern retirement takes many forms, with more of us continuing to work later on in life or on a part-time basis. Is phasing your retirement an option that you’ve considered? Perhaps you’d like to start your own business – or perhaps it’s a necessity to ensure you can live how you’d like when you retire fully. Would the State Pension and any other investments you may have, such as your home or other pensions, fund your current lifestyle, for instance? Don’t forget to also factor in inflation, which could affect the buying power of your money in the future.

As well as changing your working habits, you should consider how events that could happen after you retire could impact on your finances. No one likes to think about ill health or long-term care, but getting prepared early will ensure you have a plan in place should you need it.  Your children or even grandchildren may also need some financial help – maybe it’s with education, or getting on the property ladder – or even a wedding.

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What's the ideal retirement job for you?

Not everyone wants to let go of their working life when they reach retirement age. 

More than half of people due to retire this year are planning on working past State Pension age.

Many people are planning to keep their careers going. Some are even aiming to start a new career, perhaps as budding entrepreneurs.

The results of our Class of 2017* study found that more than half of people due to retire this year (51%) are planning to work past their State Pension age, or are already doing so.
Of them...

33%

enjoy working

26%

don't like the idea of retiring and being at home

20%

would like to start a new business or earn money from a hobby

So, what are your job options in retirement?

Stick with your current job

You may have hit State Pension age, but that doesn’t mean you have to automatically give up your day job. Just under one in 10 people (9%) surveyed who plan to work past State Pension age would stay full time in their current jobs.

You could also go part time. More than a quarter of people in the study (28%) who aim to work past State Pension age said they would stay in their current job, but reduce their working hours. It’s a chance to gradually shift into retirement mode.

Sign up for voluntary or charitable work    

When working past State Pension age, many people may be motivated by reasons other than money. It can be a chance to have a renewed purpose and stay active in your community. Or it could just be because you may miss the routine. 

Having the chance to help others whilst also keeping yourself active can be rewarding and make you feel like you're contributing to something worthwhile.  

Find out about the wide range of things you can do for good causes

Start your own business    

Retirement can be a time to make your long-held dreams become a reality. That may include starting a new venture. An entrepreneurial one in five (20 per cent) hope to either start a new business or earn some money from a hobby. You could:

  • Follow your passion and try earning money from your hobby.
  • Use the skills from your previous career to make and sell a product or sell your services.
  • Learn a new skill to create a product or service.

Whether you set up your own venture, go part time or volunteer, the big benefit is being able to choose how you fit your new working life around the other exciting things on your retirement ‘life list’ that you’d like to do.

It’s also important to think about your future income. This could be from any pensions and savings, as well as your retirement job. Carefully consider your finances, and even talk to your pension provider, so you can fund your ideal lifestyle – in work and beyond.

*Research Plus conducted an independent online survey for Prudential between 8 and 22 November 2016, among 10,605 non-retired UK adults aged 45+, including 1,000 planning to retire in 2017.

 

 

51%

 

 

would consider working past State Pension Age, according to our Class of 2015 research

 

 

 

 

 

30%

 

 

want to reduce hours with their current employer

 

 

 

 

 

10%

 

 

want part-time work with a new employer

 

 

 

So, what are your options for phasing your retirement? 

Going part-time

Going part time is a great way to carry on earning, whilst also giving you back some time for other pursuits. Nearly a third of those surveyed in the Class of 2015 study would like to reduce the hours they work with their current employer. 

Changing jobs

Changing jobs can be refreshing. It could also enable you to move into a part-time role so you have more time to yourself. Just over 10% of people surveyed would look for a part-time job with a new employer. Would you? 

Delaying retirement altogether

Some people are choosing to delay retirement altogether. Just over 10% of those surveyed said they would carry on full-time in their current job. Over half the people surveyed (51%) would consider working past State Pension Age to help improve their financial position. Would you like to stay in your current role for longer? 

There may be other benefits to continuing in some form of employment too. Over half (57%) of survey respondents would consider staying in work to stay mentally and physically fit. Over a third (39%) enjoy working, and 35% would miss the social side of interacting with colleagues if they weren’t working. 

The opportunities a phased retirement may bring can be exciting. It’s important to gather all of the information you need, including talking to your pension provider, to help ensure it’s the best option financially, as well as for your lifestyle.  

*Research Plus conducted an independent online survey for Prudential between 21 November and 4 December 2014 among 7,687 UK non-retired adults aged 45+, including 1,012 intending to retire in 2015 that feature in the above.

 

 

51%

 

 

would consider working past State Pension Age, according to our Class of 2015 research

 

 

 

 

 

30%

 

 

want to reduce hours with their current employer

 

 

 

 

 

10%

 

 

want part-time work with a new employer

 

 

 

So, what are your options for phasing your retirement? 

Going part-time

Going part time is a great way to carry on earning, whilst also giving you back some time for other pursuits. Nearly a third of those surveyed in the Class of 2015 study would like to reduce the hours they work with their current employer. 

Changing jobs

Changing jobs can be refreshing. It could also enable you to move into a part-time role so you have more time to yourself. Just over 10% of people surveyed would look for a part-time job with a new employer. Would you? 

Delaying retirement altogether

Some people are choosing to delay retirement altogether. Just over 10% of those surveyed said they would carry on full-time in their current job. Over half the people surveyed (51%) would consider working past State Pension Age to help improve their financial position. Would you like to stay in your current role for longer? 

There may be other benefits to continuing in some form of employment too. Over half (57%) of survey respondents would consider staying in work to stay mentally and physically fit. Over a third (39%) enjoy working, and 35% would miss the social side of interacting with colleagues if they weren’t working. 

The opportunities a phased retirement may bring can be exciting. It’s important to gather all of the information you need, including talking to your pension provider, to help ensure it’s the best option financially, as well as for your lifestyle.  

*Research Plus conducted an independent online survey for Prudential between 21 November and 4 December 2014 among 7,687 UK non-retired adults aged 45+, including 1,012 intending to retire in 2015 that feature in the above.

You’ll spend your time in different ways when you’ve retired, and your day-to-day budget and cash needs will likely change, with some costs going up and some coming down.

Because you’ll probably spend more time at home, things like your energy bills are likely to go up. But if you were commuting to work, these costs are likely to come down. You’ll also need to factor in any money that you owe on bills, debts or your mortgage, and ensure you have enough to cover any new hobbies or significant holidays you’d like to take - along with insurance.

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Guaranteed income (annuity) tips before you buy

If you've been paying into a personal pension during your working life, you'll have been building up a pension fund. There are various ways you can access this money from age 55. One of the options is to buy a guaranteed income for life (also known as an annuity). This is designed to provide you with an income for the rest of your life, no matter how long you live.

 You're guaranteed to keep receiving an income for as long as you live.

You might have also paid into a pension scheme with an employer - if this is the case you'll need to find out how to access this by contacting them directly. Unless you have a final salary (defined benefit) pension scheme where you should automatically receive money as an annuity.

There are a number of different types of guaranteed incomes for life. But what they all have in common is that you’re guaranteed to keep receiving an income for as long as you live. We've put together some tips to help you work through your options.

Things to think about

  • Fixed or flexible income? Your income options and needs - having an idea of what you want to do in retirement and what your financial needs may be will help you determine if you want a secure and regular income for the rest of your life or as an alternative retirement option, flexible income (also known as drawdown) gives you more flexibility with your pension savings by being able to access them as and when you want to.
  • What you'll need to buy in future - what you spend your money on in retirement may be different to your current needs. For example, your utility bills may rise if you're spending more time at home. When choosing an guaranteed income option, it's important to consider the effects of inflation as it could reduce the spending power of your income in the future. Also, it's worth knowing it's possible to buy a guaranteed income which increases with inflation, but this will affect your starting income.
  • Compare the market - you can buy a guaranteed income from any provider, so you should shop around, and, depending on your circumstances, you may be able to get a higher income elsewhere.
  • When to buy - if you delay buying your guaranteed income when you retire, you won't necessarily get a higher income in the future because guaranteed income rates can go down as well as up. It may also mean that you are losing out on income that may take longer to recoup than any growth of your fund from leaving it where it is invested.
  • Your health - if you and/or your partner have certain health and/or lifestyle conditions, you could be entitled to a higher income. Different providers may also cover different conditions.
  • The type of guaranteed income you choose - if you want to provide an income for your loved ones after you die you should consider the options such as joint life or adding a guaranteed payment period, or you could do both.
  • The impact on any means tested benefits you receive - Housing Benefit, Income Support, or other benefits might be affected by the guaranteed income you buy.
  • Existing debts - if you have debts, any creditors could have a claim on the money you receive.
  • Check your original pension plan - before looking to buy a guaranteed income on the open market, check what's available under the standard terms of your pension. For example - you may be entitled to a guaranteed annuity rate or guaranteed minimum pension which may provide a higher income.
  • Consider topping up your pension pots and/or combining your pension funds to buy a guaranteed income - this could give you a higher income when you retire - but the value could still go down as well as up whilst it's invested, so you may not get back the amount you put in. Combining funds could also impact on any guarantees you may have in place with your existing pension provider. 

Getting help to decide what's right for you 

We are not recommending a particular retirement option, or course of action, over another. 

For some products, like annuities, it’s important to shop around so you can get the highest possible income. Yours or your partner’s health and lifestyle can increase the amount of income you or your partner can get. Different providers might use different criteria to assess yours or your partner’s health and lifestyle conditions. This is known as an enhanced annuity. Prudential do not offer enhanced annuities but you might qualify for an enhanced annuity with another provider and get a higher income. That’s why it’s very important that you should shop around.

We recommend you use Pension Wise, a free, impartial guidance service offered by the Government to help you understand your retirement options. You can speak to them on 0800 280 8880, and book an appointment to meet someone in person. You can also speak to a financial adviser.

Be mindful that investment scams exist and so it's important to be vigilant and carefully check the facts before deciding what to do with your money.

If you're a member of an occupational pension scheme, the options available to you may vary, so please contact your scheme provider.

Whether you own your home or are renting, you’ll need to consider where you want to live when you retire, and the role your property could play in your future.

Think about whether you plan on moving for a change of lifestyle – or if you may need to downsize or release some equity from your home. Or if you want to make improvements to the property you already have.  

You may also want to make provisions for an elderly parent living with you or for your own long-term care.

Getting older needn't always be a bad thing... 

Depending on your age and where you live, there could be government benefits on top of any State Pension you may get, plus savings on things like healthcare and travel that could really boost your future income.

According to Age UK, billions of pounds in benefits and Pension Credit is going unclaimed by older people each year. Find out what’s available in your local area, and make sure you're not missing out.

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What could you be entitled to in retirement?

Did you know that when you reach State Pension age you no longer pay National Insurance contributions - even if you're still working? Many people don't know this, and along with any State Pension you may get, there might be other financial benefits as you get older too.

According to Age UK, each year up to £3.5bn of Pension Credit and Housing Benefit goes unclaimed by older people. That's money you could be entitled to. In addition, you could save on travel, health costs, and things like days out and going to the cinema. 

Sound good? Get clued up so you don’t miss out.

According to Age UK, each year up to £3.5bn of Pension Credit and Housing Benefit goes unclaimed by older people.

Benefits available from the UK government 

Pension Credit
If you’re aged 65 or over, living in the UK and are on a low income then you may be able to get 'top ups' for the State Pension. That means you get a higher income. Visit the gov.uk website for more information and how to apply.

Housing Benefit
You could get help to pay your rent if you are on a low income. Visit the gov.uk website for further information.

Council Tax reduction
If you're on a low income and your savings are below a certain amount you might be able to get a reduction on your Council Tax. This could be as much as 100% so if you think you might qualify, visit the gov.uk website.

Winter Fuel Payment
You could get between £100 and £300 tax-free to help you pay your heating bills. For more information on your eligibility and how to apply, visit the gov.uk website.

Attendance Allowance
If you're aged 65 or over you could claim Attendance Allowance. This is to help with your care if you have an illness or disability. You can find out more on the gov.uk website.

Cold Weather Payment
If you're getting certain benefits, such as Pension Credit, you may be eligible to claim the Cold Weather Payment. This is to help you during periods of very cold weather between 1 November and 31 March. Visit the gov.uk website for more information.

Personal Independence Payment
You may be able to get help with some of the extra costs caused by long term ill-health or disability. If you think you might qualify, visit the gov.uk website.

Carer's Allowance
If you care for someone for 35 hours or more per week, then you could be entitled to Carer's Allowance. Find out more on the gov.uk website.

Savings on health and travel costs
We've listed the main ways that you could save on health and travel costs. It's a good idea to find out what else is available in your local area too as benefits can vary depending on where you live.

Free prescriptions and eye tests
If you're over 60 years of age then you qualify for free prescriptions and eye tests from the NHS. 

Pension Credit Guarantee Credit
If you receive Pension Credit Guarantee Credit then you qualify for free prescriptions and eye tests, as well as free NHS dental treatment. 

Free bus pass
If you live in England, once you reach the female State Pension age, you could travel for free on local buses.  In Scotland and Wales, you qualify for the free buss pass at age 60. To find out more, visit the gov.uk website.

Senior railcard
For £30 a year (as at May 2018), anyone aged 60 or over can save 1/3 on Standard and First Class rail fares throughout Britain for a year with a Senior Railcard. For more information and to apply, please visit the National Rail website.

Other ways to save
Many museums, cinemas and attractions offer discounted prices for the over 60s, so whether you fancy a trip on the London Eye or watching the latest blockbuster - make sure you look out for concession prices!

Think about whether you’ll need to make provisions for a partner or dependants - both when you retire, and after you’ve gone. This may be for an elderly parent in need of financial support, or a grown up child heading to university or buying their first home.

When it comes to passing your pension on after you die, you can nominate to do this when you are still contributing to your pension plan or at the time you turn this into a guaranteed or flexible income.  If you take your pension savings as cash and have a Will, it will be up to you who you leave any money you have left, to. 

Find out about the options available below, and the varying tax implications depending on whether you are still paying into your pension fund, or if you’re already taking it out as an income. 

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Ways to pass your pension on

The way that you decide to take your pension will affect what you can do with it when you die.

Whilst it’s not always easy to talk about, the way you will eventually pass on your pension has most impact on other people, so it could help to talk with your spouse, children - or other people close to you, when you’re deciding how you take your pension savings.

Pension death benefits

The type of benefits that can be paid (lump sum and/or income options) will depend on the scheme rules and the type of arrangement the benefits are being paid from.

If you have the option to nominate who you want to benefit this may have an impact on the type of death benefits that can be paid.

Tax may be payable on the amount inherited after you die. Further information is available on the gov.uk website.

Annuity death benefits

Rather than have your money die with you, you may have selected a guarantee period or a joint life option, or both, when you set up your annuity. This means ongoing income will be paid to your loved ones for either a set period of time - or for the rest of their lives. 

Serious ill health

If you are under the age of 75 and become seriously ill (you are expected to have less than 12 months to live) you may be able to take your whole pension fund as a tax free lump sum. If you are over the age of 75 in this circumstance you may take any remaining pension as a cash lump sum which will be added to your income and taxed accordingly.

Further information regarding serious ill health and your pension can be found on the gov.uk website.

What happens to your State Pension?

When you die, your husband, wife or civil partner may be entitled to receive some of your State Pension entitlements depending on individual circumstances.

Find out more about inheriting a State Pension from a partner or increasing qualifying years on the gov.uk website

Where to get further information

Each option has its own tax implications, benefits and considerations, which you should take into account before making a decision. You can get more information from the following sources or seek financial advice:

Current rates and allowances can be found on our Tax and Allowances webpage.

Because tax rules can change, the impact of taxation (and any tax relief) depends on your individual circumstances. 

Once you’ve worked out what your pension pot and any other savings, investments, property or entitlements could provide, you’ll be able to look at whether this would help meet your future income requirements and the lifestyle you envisage. It could also influence when you should be able to achievably retire, to try and ensure that you are financially secure. Living longer, with the potential for more time in retirement along with a rising State Pension Age, are all things to consider.

If there is going to be any potential shortfall, topping up your pension in the final years before you retire could make a difference to the amount of money you’ll have to retire with. Alongside this, if you are considering delaying your retirement and continuing to contribute to your pension, the value could still go down while the money is invested and so this will not necessarily mean a larger pot or a higher income when you do come to take it.

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Benefits of topping up your individual pension

As you fund an individual pension yourself, the more you pay in, the more potential there is for you to achieve the retirement you want. You could also get tax relief on the additional contributions, so it's worth considering topping up your pension.

What difference could it make?

For example, if you are a basic rate taxpayer and you paid in £80 per month to your personal pension, the taxman would add another £20 in tax relief. Over 20 years this would add up to a total pension contribution of £24,000. Broken down, 20 years equals 240 months. So, 240 x £80 = £19,200 in pension contributions and 240 x £20 = £4,800 in tax relief.

And if you earn above the basic rate of tax, you can also claim additional tax relief through your tax self-assessment form. You can also do this online.

Plus you could make an even bigger difference to your pension pot by topping up your contributions, although tax relief is subject to government limits.

If you're a Scottish Rate tax payer, your Personal Allowance and rate of income tax is the same as the rest of the UK. However, the amount you can earn before paying higher rate tax will be £30,931 (totalling £43,431 which includes the £12,500 personal allowance). 

For more details on the Scottish Rate of Income Tax, please visit the https://www.gov.uk/scottish-rate-income-tax

Topping up your pension could boost your income in retirement.

Please remember that the value of your pension fund can go down as well as up so you might get back less than you put in.

Topping up - the earlier the better

Topping up your pension could boost your income in retirement. And the earlier you start, the more potential your fund has to grow.
 
And if you opt for an automatic premium increase (API), by adding an extra 5% to your premium every year for instance, your fund could have even more potential to grow.

This is for illustration only and is based on our current understanding of current tax legislation and HM Revenue & Customs practice, both of which may change without notice. The impact of tax (and any tax relief) will depend on your individual circumstances.

Why it could pay to top up your workplace pension

So the great news is you’ve taken the first step, and are already a member of a workplace pension scheme.

This means you’re taking advantage of any contributions your employer makes into your plan. And the more you contribute (within limits), the more your employer may too – so it’s a win-win!

Long-term, this opportunity to receive increased employer contributions could really help shape your future retirement plans.

It's therefore worth having a conversation with your employer to understand their scheme rules about how much they'll contribute if you wish to top-up your regular payments. This may be up to a certain percentage of your salary.

Let's also look at a simple example of how topping up your workplace pension plan could make a difference. 

There are various ways you can boost the benefits of your workplace pension plan.

What difference could it make?

For example if you contributed £100 per month (which includes £20 basic rate tax relief) over 20 years, assuming your employer matched your contributions, this would give you a potential pot of £48,000. Broken down, this means you'd contribute £19,200; the taxman would contribute £4,800; and your employer would contribute £24,000. This would be more if you earn above the basic rate of tax.

In addition to this, the more you've paid into your workplace pension plan, the more the taxman may provide in tax relief, subject to government limits.

You can also use this free workplace pension calculator to help see the effect of contributions into a workplace pension plan.

Please remember that the value of your pension fund could go down as well as up and so you may not get back what you put in.

How do I top up my workplace pension?

There are various ways you can boost the benefits of your workplace pension plan (to find out more refer to the key features of your own workplace scheme).

  • Speak to your employer about topping up your workplace pension.
  • You can supplement your contributions through an additional voluntary contributions (AVC) plan, although your employer may not match any contributions through this. This is an individual policy that aims to boost the benefits of your workplace scheme.
  • You can set up an individual pension arrangement to supplement your company pension. 

If you're thinking of making changes to your plan, including adding more money, it's really important you speak to a financial adviser. They can help you understand if what you want to do is right for you and your aims and circumstances, that may have changed since you took your plan out. They'll be responsible for the advice they give and you'll also have protection from the Financial Ombudsman Service.

Regardless of whether you’ve taken advice, you can refer any matter to the Financial Ombudsman Service for consideration should you feel that you haven't been treated fairly, or for any other aspect under the Financial Ombudsman Services remit.

This is for illustration only and is based on our current understanding of current tax legislation and HM Revenue & Customs practice, both of which may change without notice. The impact of taxation (and any tax relief) depends on individual circumstances.

Choosing what to do with your pension savings is one of the most important decisions you are likely to make. It's therefore a good idea to access all of the support available to you, to help you with this decision. We recommend you use Pension Wise, a free, impartial guidance service offered by the Government to help you understand your retirement options. You can speak to them on 0800 280 8880, and book an appointment to meet someone in person. And, you can visit pensionwise.gov.uk/shop-around.

You may also like to contact a financial adviser.

The retirement options you get from your pension provider might not be the best for you. It's always worth comparing what you can get from other providers too, because you might be able to get a better deal. The Money Advice Service also offers free and impartial guidance on anything and everything to do with money, not just pensions. Take a look on moneyadviceservice.org.uk. Our timeline below can also help with your retirement planning whether you’re 10 years or two weeks out. 

So what are you waiting for? It’s time to start preparing for your future.

Articles and videos you should look at

Retirement planning - no time like the present

The very concept of retirement is changing. ‘Phased retirement’ is becoming more common; the way we access our pension is now a lot more flexible, and it’s no secret that in the UK we’re living longer than ever before. A longer retirement and more choice over how you take your pension make for an exciting time. And planning ahead will help ensure you’re on track to a financially secure future. Our timeline will help you get started. 

10 years before you plan to retire

Although retirement can still seem a while away, begin to consider what you want your life to be like when you get there.  Here are some things to think about as you start to build your plan: 

  • The age you’d like to retire. 
  • How much you’ll likely have in your pension fund/s - and the income you’ll need when you retire. 
  • Any savings, investments or other assets that you could add to your retirement income.
  • How your living expenses could change in the future.
  • How you’ll pay for any travel, hobbies or further education once you’ve retired.
  • An emergency savings fund, to help with any unexpected costs like car or home repairs.
  • Paying off any debts before you retire.
  • How you’ll support your dependants once you’ve retired.
  • Putting money aside to pay for long-term care for you, your partner, or other dependants.

Don’t forget that your spending habits are likely to change in retirement. For example your commute costs are likely to be lower, but more time at home may mean your utility bills go up. A budget calculator can help you work out your outgoings and you can also find out more about your changing income needs within the ‘related content’ below. 

Planning ahead will help ensure you're on track to a financially secure future

Five years before you plan to retire

Now is the time to make sure your goals are on track:

  • Decide the age you’re likely to retire.
  • Consider phasing your retirement, and continuing to work part-time for your current or a new employer.
  • Boost your pension by increasing your contributions and/or adding lump sum payments (take advantage of any unused pension tax allowance).
  • Trace any lost pensions through the Pension Tracing Service.
  • Ask for up-to-date statements for all your pensions. You can also get a forecast of your State Pension at www.gov.uk.
  • Look over your investments and savings to see if they still meet your attitude to risk as you get closer to retirement.
  • Think about whether you’d like to take an income from your pension or whether you want a pot of cash, including any tax free allowance, to do something different in retirement.
  • Discuss your options with a financial adviser, if you have one.  You could also talk to family and friends.
  • If you’re 50 or over you can also access free and impartial guidance from Pension Wise. This service is available on the internet, over the telephone or face-to-face.
  • Write a Will or review your existing Will - and plan what will happen to your pension and estate if you die plus any tax implications.

Six months to go

It’s time to give yourself a retirement-readiness check-up:

  • Review your pension statements to get an accurate picture of what your funds are worth.
  • Make an appointment with your financial adviser for advice on the best retirement options for you.
  • Determine the best option/s for taking your pension savings to meet your financial and lifestyle needs.
  • Tell your pension providers you’re planning to retire, so that they can send you any and all information you need in plenty of time.
  • Update your beneficiary information.
  • Set a date for a pre-retirement meeting with your employer.
  • Let the taxman know you’re retiring because your change of status will affect your tax code.
  • Budget for changes in your day-to-day spending after you retire.

Twelve to eight weeks before

It’s down to business now - you’re just outside of your selected retirement date:

  • Speak with a financial adviser to consider your options and retirement plans.
  • Ask your provider about the ways you can access your pension based on the options available.
  • Re-discuss your options with an adviser, family and friends - and those who’ve already retired.
  • You should get a letter four months before you reach State Pension Age, telling you how to claim your State Pension. If you haven’t received this by three months before, here’s how to claim this
  • Look into any entitlements from the government over and above any State Pension you may get, as these could make a real difference to your living costs.
  • Don’t forget to access Pension Wise for further impartial guidance.

Eight to two weeks before

The final countdown! It’s time to make sure you have all the information you need to help make a decision:

  • Consider any retirement quotes that your provider may have sent you. 
  • Remember, if you want to use your pension to provide an income, you should shop around the different providers to get the best income you can. If you and/or your partner have a health and/or lifestyle condition then you could get an even higher income as different providers also cover different conditions.  More information on how to shop around can be found on the Money Advice Service website.
  • You'll also need to apply to your provider/s if you're moving pensions from different sources.
  • There you have it; happy retiring!
How to set-up a financial review meeting

How to set-up a financial review meeting

We believe that getting financial advice is vitally important. So, if you don’t already have an adviser, set up a face-to-face meeting with a Prudential Financial Planning adviser in your area. We can review your retirement plans and help make your finances more tax efficient. We offer a restricted advice service.

Find out about our face-to-face service