Retirement can feel like big step. It can be a great time to enjoy exciting lifestyle changes, but it is advisable to be prepared with your pension options ahead of time to ensure you can get the most out of your retirement.
In the UK, the average person between 45 to 70 has:
- A Pension pot of £74,769.
- Both private and work pension pots
- A belief that they will live to 81
- Actual life expectancy of 84.6
Research shows some regions of the UK are more prepared for this change than others – but how do you compare?
- The average retired household reportedly spends just under £2,200 a month, or around £26,000 a year.
- Londoners are the most likely to have a pension pot established, and are also the region with the largest estimated amount of pension savings, but it’s worth noting the cost of living.
- North Easterners have above average estimated pension pot sizes, they have one of the lowest living costs - 36% cheaper than the South East.
- In Scotland, people are the most accurate at estimating their anticipated length of retirement.
How can I prepare for retirement?
Do your research
Whether you know exactly when you’re going to retire, or are unsure when this may be, understanding your pension options is important for getting the most out of it.
One option to help you guarantee income for the rest of your life could be a pension annuity.
With several types of pension annuities on offer, such as joint plans with a partner or spouse which would continue to pay them if you were to pass away first, annuities can help you plan for the future.
Lifetime annuities offer a guaranteed pension income for life – regardless of how long you live – providing peace of mind.
Alternatively, fixed-term annuities offer the security of a pension income for a set amount of time, normally between one and 25 years, without being locked into a lifetime plan.
However, there are no guarantees of the income you could purchase with any maturity value received at the end of the term, as this will depend on economic and investment conditions at that time.
Considered one of the most flexible and tax-efficient ways to access your pension savings, drawdowns let you take an income or series of withdrawals from your pension savings now, whilst still providing you with flexibility should you wish to choose a different option later in life.
Remember, your ‘Open Market Option’ allows you to shop around for the best deal. Pension Wise have reported that 80% of people would have benefitted from switching providers.4
This is where Age Partnership’s Pension Income specialists can help – they compare the whole of the annuity market, including leading firms and specialist annuity providers.
It’s never too late
If the size of your pension savings is looking lower than you like compared to the rest of the country, don’t panic. It’s never too late to start saving and making changes to your lifestyle to help you enjoy retirement. The team at Age Partnership could help you make the most of your pension savings.