How to prepare for retirement now


For customers

Everyone wants to have a happy and fulfilling retirement but how do you achieve it? Well, a key part of it lies in the preparation, what you do in the lead up to retirement matters. Even if it’s still a few years away, or imminent, it’s always a good idea to plan ahead to help make sure you’re on the right track.

To help you prepare, here are six questions to ask yourself.

1. What will I do when I retire?

When it comes to retirement, we typically focus on the financial matters, but it’s also important to give some thought to what you’ll do with more time on your hands.

It sounds obvious but the move to retirement is a big change in people’s lives. The biggest change of all can be having more free time on our hands – so creating your very own ‘lifestyle plan’ of how you want to spend your post-working life is a good starting point.

Think about the things you’ve not had a chance to experience yet – and what hobbies, interests or passions you want to pick up or continue. Who with and where do you want to spend it? 

By working out which parts of your current life are most fulfilling, you’ll be able to see more clearly what you want the future to look like. There’s no one-size-fits-all solution. Maybe you just want to spend the time relaxing with friends or family or are looking forward to going on holiday again. Remember: there are plenty of free things to do, not everything needs to be an additional expense.

Writing down a plan can help keep you busy, focus your mind and keep you optimistic towards the future.

2. How much money do I need for retirement?

Now you’ve worked out what you want your retirement to look like – you should have a clearer picture of how much money you might need to sustain it.

Consider creating a likely future monthly budget to reflect your day-to-day outgoings for retirement, as your spending habits will probably change. For example, you may spend less on travel and work-related expenses, and you might have even paid off your mortgage – but during retirement you could end up spending more on heating, recreational activities and health care.

Depending on what your goals are – you might want to have money available to support children, or grandchildren, going to university or a nice lifestyle pot built up to dip into and enjoy.  

Top tip: When you write down what you spend now and how that could change when you retire – take inflation into consideration. As time goes on, the prices of things tend to increase so having an extra safety net in place can be useful. 

3. What sources of income will I have for retirement?

So, you’ve now worked out how much you might need for your ideal retirement – another key part of your preparations ticked off. But how much do you have now, and are you on track to meeting that figure?

Your retirement pot could consist of workplace pensions, personal pensions, ISAs, investments and the State Pension.

If you’re part of a workplace scheme, check to see how much you’ve got saved in your pension pot – you should consider regularly reviewing this to make sure you’re saving enough.

The good news is that under auto-enrolment your employer will have made contributions to your workplace pension too.

Don’t forget about your previous pension pots

It’s also worth checking to see where all your workplace pensions are if you’ve worked at more than one company. Tracking all your pensions down is a good place to start to make sure you’re not losing out on any valuable income.

As long as you’ve kept your address details up to date with each provider of your personal or workplace pension pots, you should receive a pension statement for each pot each year. If you can’t remember all the details – don’t worry, it’s easier than you might think to find them. The Government offers a free service to help you search for lost or missing pension pots.

You might end up pleasantly surprised.

The State Pension

If you’re eligible for the State Pension from the Government, the amount you’ll receive will be different from other people, as it’s based on your National Insurance contributions and your own personal circumstances.

The full new State Pension is £185.15 per week but not everyone will receive this amount.1 You can check your State Pension forecast on the government’s website to see how much you could receive, when you can claim, and if you could improve it.

You can also find out more by reading our article, Your guide to understanding the State Pension.

Something to bear in mind: you’ll receive your State Pension for the remainder of your life once you hit your entitlement age, but your employer and personal pensions could be a finite amount from when you’re able to legally access them if you select an income drawdown.

4. How can I save more before I retire?

If you think you might need to save more for retirement, there’s a few things you could consider – this is not guidance or advice.

  • Start sooner than later. The earlier you start putting money away, the longer it could have to grow. It’s important to remember that the value of an investment can fall as well as rise and isn’t guaranteed. The final value of your pension pot when you come to take benefits may be less than has been paid in.
  • Set yourself achievable goals and work towards them. Each time you reach a small milestone, take time to recognise how good it feels to keep you motivated.
  • Look at your current workplace pension contributions. Could you afford to make changes to this amount? Perhaps it’s something you review every year even if it’s just by a small amount.
  • Review your current spending habits to see where you can save money. There are lots of apps on the marketplace. For example, the Emma app helps you manage money, or Too Good to Go, allows you to pick up a deal on fresh food from cafes, restaurants or shops that would otherwise go to waste.
  • Retire a bit later in life. You might decide that you want to keep working even if it’s part time or flexible hours which could give your more time to improve your savings.

We recommend you speak to a financial adviser first to see what’s the best option for you. They are trained professionals who can understand your personal circumstances and come up with a plan to help you reach your retirement goals. You can find a financial adviser through MoneyHelper. There may be a charge for this.

5. How can I try clear my debts before retirement?

Trying to clear your debts before entering retirement can help create some peace of mind – as it’s one less thing to think about.

Prioritising your debts could help you create a plan of action to help tackle each debt one by one. Think about:

  • What debts are most important to pay off, followed by non-priority debts and then debt emergencies.
  • How much is owed for each debt – this could be personal loans, credit cards or even your mortgage.
  • Using spare money to pay off other debts – but anything you can afford to pay towards your debts must be shared out fairly between your creditors.2

6. How will I access my pension?

If you’ve not already, it’s now time to set a target retirement age and think about how you’re going to access your pension pot.

When you reach age 55 (57 from April 2028), you’re able to access some or all of your pension benefits. When thinking about your options you should consider a few factors that will influence the type of income option that best suits you – such as your personal circumstances, lifestyle and health.

Some contracts might restrict the retirement options available to you and all options are subject to tax implications, so it’s important to at least consider consulting a financial adviser. Flexible income, guaranteed regular income, cash lump sum or a combination? Our retirement planner helps explain these, sometimes complex, terms in a simple way so you can be better informed – and prepared.

There you have it, you’re set for the next chapter

By asking yourself these six questions you’ll feel more prepared – and hopefully empowered – to take on life after work.

Financial planning for retirement really is important to make sure you have enough income to support you and your family. But it’s also just as important to plan for the moments that matter as well as some fun along the way.  

Plan ahead while being realistic. People tend to be living longer lives than they did decades ago, so bear in mind your retirement income will need to support you for potentially 15, 20, 30 plus years after you retire.

By reviewing your pensions, savings and investments every now and again – you’ll be able to have a more up to date view. And remember, it’s not too late to try save more if you need to before you retire.

Get further help if you need it

Aegon Assist can offer free guidance and the team will be happy to talk you through your options for retirement, though they are unable to provide you with advice.

If you're in any doubt, we recommend you speak to a financial adviser. You can find a financial adviser through MoneyHelper. A financial adviser is likely to charge for their service and should provide details of their charges upfront.



1 The new state pension. Data source, GOV.UK, May 2022.

2 How to prioritise your debts. Data source, MoneyHelper, December 2021.