Tips to help you achieve your desired retirement
What does your ideal retirement look like? Perhaps you dream of travelling, fulfilling long-held ambitions or pursuing hobbies you haven’t had time for while you’ve been working. Or maybe you’re looking forward to taking it a bit easier and spending time with your nearest and dearest.
Whatever you have in mind for your retirement, it’s important to know how much money you’re going to need. Once you know this, you’ll be able to work out whether you’re on track to achieve it or if you need to make some adjustments. You’ll also be able to make important decisions, such as when you can retire.
Estimate how much money you’ll need after tax for a comfortable retirement. Factor in expenses such as housing, bills, transport, food, healthcare and any debts you’re paying off. Then consider how much money you’ll need to achieve the type of lifestyle you’d like. For example, you might want to have regular holidays, take up a hobby or socialise more.
Top tips to help you achieve the retirement you’d like
1. Invest into a pension
Pensions are a particularly effective and tax efficient way to invest for your retirement. For every £80 you invest the government will add £20. If you pay 40% or 45% Income Tax, you can reclaim additional tax relief through your annual tax return.
Any growth is free from UK Income Tax and Capital Gains Tax, which can give your retirement fund a boost. Also, pensions aren’t normally subject to Inheritance Tax, which means they can be more easily passed on to family and dependants.
The tax treatment of pensions depends on individual circumstances and may change in the future.
2. Start as soon as you can
When you’re young and retirement is far away, pensions can seem like a low priority. You might be saving for a house, raising children or simply paying the bills. But it’s never too early to start saving into a pension, even if it’s only small amounts. In fact, the sooner you do, the harder your money can work for you.
The longer your money is invested for, the more potential it has to grow, as the returns you earn could generate more returns. Over time, this can really add up and make a big difference to the size of your pension pot.
You should be aware that the value of investments may rise or fall and you may get back less than you invested.
3. Put more in whenever you can
Even small increases can make a big difference, so it’s worth increasing your pension contributions whenever you’re able to. If you have a workplace pension that your employer also pays into, their contributions may also increase, so it’s worth finding out whether this is the case.
4. Keep track of your pensions
To find out how much State Pension you could receive, check your State Pension forecast.
If, like many people, you’ve had multiple jobs, resulting in multiple workplace pensions, it can be difficult to keep track of them. If you’re concerned that you may have lost one or more of your pensions, the government offers a free Pension Tracing Service to help you find previous employers.
You may also want to consider combining two or more of your pension pots, but it’s worth taking financial advice first to make sure this is right for you.
5. Get good advice
Navigating retirement planning can be complex, so it’s worth getting advice from experienced professionals. If you’re over 50, book an appointment with Pension Wise. This service offers free impartial pensions guidance to over 50s. The appointment can last up to 60 minutes, and you’ll end up with a document summarising your pension options and next steps.
If you’d like further advice, our Financial Advisers will be happy to help you. They’ll take time to understand your individual needs and work with you to develop a plan that’s right for you.
NFU Mutual Financial Advisers advise on NFU Mutual products and selected products from specialist providers. When you contact us, we'll explain the advice services we offer and the charges.
Financial advice is provided by NFU Mutual Select Investments Limited.
Why you should continue paying into your pension after you’ve retired
Not everyone is aware that they can continue to pay into their pension, even after they’ve retired. But in fact, there are considerable benefits to doing so.
1. Tax relief if you’re working
If you’re still working and you pay into your pension, providing you’re under 75, you’ll still get tax relief on your pension contributions. For every £80 you invest the government will add £20. If you pay 40% or 45% income tax, you can reclaim additional tax relief through your annual tax return.
2. Tax relief if you’re not working
If you’re not working, or earning below £3,600, you can still earn tax relief on contributions up to £2,880 each tax year, to which HMRC will add a further £720.
3. Take up to 25% tax-free
In most cases you can take up to 25% tax-free from your pension, which is a significant benefit, particularly if you have a generous pension pot.
4. Tax-efficient growth potential
Any growth is free from UK Income Tax and Capital Gains Tax, which can give your retirement fund a real boost.
5. Pass on to family and dependants
Pensions aren’t normally subject to Inheritance Tax, which means they can be easily passed on to family and dependants.
Your NFU Mutual Financial Adviser will be able to provide advice on the right options for you, based on your personal circumstances.
What's next?
You can give us a call on:
0800 622 323
You can open a new pension or top up an existing pension online:
Looking for financial advice?
If you’re not sure how to put your financial plan in place, one of our NFU Mutual Financial Advisers can help. They'll be able to recommend products that are right for you based upon your personal circumstances. You can book an appointment with an NFU Mutual Financial Adviser by either calling: 0800 622 323 or requesting a call back.