The ultimate ‘planning your retirement’ checklist

Here’s everything you’ll need to know, do and consider before you receive your final paycheck.

Welcome to Pension Awareness’ ultimate retirement checklist! A list, a guide, a tapestry of choice - if you will - to planning your perfect retirement. Here’s everything you’ll need to know, do, and consider before you receive your final paycheck.

1. Begin building the warchest

Work out how much money you’ll need in retirement

First things first - your retirement won’t be paying for itself. What about the increased lunches out now you’re at home? The caravan or motor home, so you can travel all over the country? Or treating the grandkids! These things, whatever they may be, are likely to come straight out of your retirement savings. Factor in your everyday expenses and travel costs like fuel.

But remember, other costs may go down. For instance, you might not have a mortgage, you might save money on commuting costs, and pension contributions.

A body called the Pension and Savings Lifetime Association have created a rough guide on how much you might need in the future – the guide is based on independent research by Loughborough university.

Take a look at their outlooks for minimum, moderate and comfortable lifestyles in retirement, and line up your needs with their estimates.

Money Helper even has a handy budget planner that you could use to wargame your day-to-day retirement spending. Check it out here!

Once you know roughly what amount you need to get to, you can work out how to get there.

“I can’t find my pension!”

Have you ever suddenly realised that you couldn’t find your glasses, only to find them sitting silently on top of your head? Yeah? Yeah, pensions are a bit like that.

One of the biggest steps to building the ultimate retirement warchest is to find lost pensions - or simply track down those you’ve lost contact with over the years.

The Association of British Insurers calculates that there are… wait for it… £26.6 billion sitting in lost pension pots in the UK. That’s a lot of money. Lost money. And the crazy thing is that pensions are easy to find. It just takes a bit of time and effort.

The UK Government provides a free pension tracing service. If you know your ex-employer’s details, or even just a name, you should have no problem tracking down your savings.

Contribution conundrums

One of the most surefire ways to consolidate a strong retirement income is to optimise your pension contribution levels (we’re talking about defined contribution type pensions here). Consider whether your current workplace pension is grafting for your future. It might be worth asking yourself a few questions: could you be contributing more? Are you making the most of your employer’s contributions? Do they match contributions?

Every little helps, even if you’re just a few months away from hanging up the… well, the proverbial workplace item.

It’s always better late than never to make the most of contributing. Remember that there are tax benefits to it, too. If you need a refresher course on how contributing works, check out our FAQs page.

National Insurance Make or Break

Did you know that everyone is entitled to the State Pension?

A retirement benefit that is designed to supplement your income in retirement. At its maximum level, the New State Pension will pay you a very tidy £203.85 per week throughout retirement. Except, the catch is that you’ll have to have made enough qualifying years of National Insurance contributions. 10 years to qualify, but it’s 35 to get the full amount. You can check how much State Pension you’re likely to receive by using the free Government State Pension forecast service.

Did you know? The day you’re paid the State Pension depends on the last two digits of your National Insurance number.

Investments to write home about

Another way to set your retirement in great stead is to take a look at your investments. Are you investing in the funds you want to? Do they align with your moral values, or are they performing as you want them to? Has your attitude to risk changed?

If you’ve never thought about investing, it’s likely you’re in your pension’s default investment option – the one you’re put into if you don’t choose anything else. Around 95% of DC pension scheme members are in a default option.

Being in the default fund isn’t a bad thing but because these funds aim to satisfy the majority of members in the pension scheme, it just means your pension may not be working as hard it could.

Choosing your own funds may be better suited to you, so it’s worth taking a look. You can do this by speaking to your pension provider or viewing your pension online and looking through the fund options. Choosing your own funds will take a bit of homework, so this topic may be best broached with a financial advisor, who will help to work out a bespoke plan.

Now, we’ve all heard the saying that ‘the value of your investments can go down as well as up’. And it’s true. Nothing is guaranteed when you invest. With pensions, there’s always a risk that you might not earn what you expect to.

2. Crossing the I’s and Dotting the T’s


Did you know? You can’t leave instructions for what you want to happen to your pension money in your will, you have to tell your pension provider who you want to nominate.

It’s usually as simple as filling in a form, so it shouldn’t take too long to do.

If you remember doing it a while ago, it’s worth checking your chosen beneficiary anyway. The situation may have changed, or their details may need updating. It’s a simple task but an important one to sort out before you settle down to retire.

Unpaid, unwelcome debt?

Will you have any unpaid debts in retirement? If you can kick off retirement as close to debt free as you can, you’ll have made a brilliant step towards a hassle-free lifestyle.

If you do have outstanding debt, tot it up: how much do you owe across your accounts (that might be credit card debt, or personal loans), and how much is the interest rate on each debt?

Consider paying off those debts - starting with the one with the highest interest rate.

3. Give me the money!

Your retirement options…

Time to withdraw! But, how to do it is a whole different kettle of fish. There are multiple methods, and which one works best for you will depend on your personal situation. If you’re feeling overwhelmed, then check out last year’s live stream where we talked all about how to take your money.

The taxman giveth, but the taxman taketh away.

Up until now, your pension has benefitted from tax relief every single time you’ve contributed. But now you’re about to withdraw that money, you’ll have to pay income tax on it over your personal allowance. 25% of your withdrawal is usually tax-free - regardless of whether you take a lump sum, buy an annuity, or opt for drawdown.

A great step to take is to estimate how much income tax you’re likely to pay when you withdraw.

A financial advisor can help with this if you're unsure where to start, and remember, if you’re over 50 you’re entitled to a free, impartial guidance session with Pension Wise.

Pension Awareness Live is supported by Money Helper.

If you would like a web chat to talk about pensions, you can go to the Money Helper website by clicking the link below:

Give us a call

General Enquiries: 0800 011 3797*
Outside UK: 0800 011 3797
Self Employed: 0800 011 3797

Mon - Fri: 9am - 5pm
Sundays: Closed
Bank Holidays: Closed

Book a live chat

If you would like a web chat to talk about pensions, you can go to the Money Helper website by clicking the link below:

* Calls are free. We're committed to providing you with a quality service, so calls may be recorded or monitored for training purposes and to help us develop our services.