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Some of the biggest retirement questions - and answers

5 minute read

If you’re reading this, it’s likely you’ve spent a bit of time on the Pension Buddy site. But if this is the first article you’ve read, it’s nice to meet you!

If you are a regular visitor here, perhaps you’re one of those clever people who have created a free personalised Pension Buddy Plan? This is a helpful way of getting to grips with the key things to know about retirement planning.

Quite a lot of you have taken advantage of this useful free service and, because of this, we know a fair bit about the biggest retirement questions on people’s minds. We’ve seen some concerns coming up frequently, so we thought it might be good to address a few. Here’s our ‘Top Five’.

1. Do I actually need financial advice when I retire?

We’re putting this one at the top of the list because it was a subject that seemed to cause real confusion and concern. From the responses, we learned that around one in five felt they didn’t need professional financial advice to help plan their retirement. Which is great – that’s a good chunk of people who feel they’re organised and prepared for their financial future.

But that left nearly four-fifths who were a lot less certain. Indeed, the most common response to the question about advice was ‘Don’t know’. This suggests there’s a lot of people who don’t really understand what retirement financial advice is all about, the benefits it can offer or maybe even where they should go to get it.

That’s a whole lot of confusion.

Pension Buddy doesn’t give you all the answers, but it does help you make a start. Have a look at this page about getting financial advice, where there are some signposts if you have specific queries.

An alternative to speaking to an adviser is Destination Retirement - a completely new kind of financial planning and advice service that can be a great help when you’re ready to retire or when you want to start taking money from your pension pot.

As a final note – whoever you decide to talk to, always ensure that you deal with companies registered with the FCA – the Financial Conduct Authority. It’s good to have peace of mind.

2. Just how much do I need for a comfortable retirement?

This was one of the biggest topics of interest among people creating their Pension Buddy plan, with more than six in ten keen to know how much they need for a comfortable retirement.

It can be a difficult question to answer, and – as with most pension-related questions – it depends on a lot of different things! But luckily, there’s help available to help you get started.

In 2019, the Pension and Lifetime Savings Association (PLSA) launched the ‘Retirement Living Standards’. These provide guidance on the ‘minimum’, ‘moderate’, and ‘comfortable’ brackets for retirement income. You can see the figures on this page.

But these are just a starting point. Realistically speaking, much of this will depend on exactly what you plan to do in retirement. So it’s really important to start thinking about what kind of retirement you want.

Here’s some more information about creating a retirement budget plan.

3. Am I on track?

This was also a very hot topic, with nearly 60% of people wanting to know whether they’ll have enough money to retire.

It’s great that so many people are asking themselves this question, and the earlier the better. Because if you find out you might not have enough money saved but you’re still some way off retirement, there’s still lots you can do to sort things out.

A good place to start is with our free Retirement Health Check. This easy-to-use tool helps you find out how financially fit you are for your life after work. We'll estimate how much your pension savings will be worth in the future, and compare this to what you might need to live comfortably during your retirement.

And if there's a shortfall, we'll show you options to get you back on track.

4. Bringing pension together

Nearly a quarter of people wanted to find out more about the pros and cons of bringing different pension pots together (also known as ‘consolidation’).

As ever, there’s no simple one-size-fits-all answer. That’s because there are so many pension schemes and so many different variables. While it can make life easier to have all your pension savings on one place, in some cases you can lose valuable guarantees if you transfer your money. And some pensions come with punitive financial penalties if you duck out early.

So there’s a lot to think about. If you want to begin exploring this, there’s a Pension Buddy page about bringing your pension pots together that might be a useful starting point.

5. Can I make some extra money in retirement on top of my pension?

Many people were keen to find out about other sources of income in retirement. This might be of particular concern if you’re worried you may not have enough saved in your pension.

Again, there’s good news. Your income in retirement can include more than just your private pension. For a start, most people will qualify to receive a State Pension. And you may also be eligible for benefits and allowances. In fact, a recent report from Just Group showed that more than six in ten pensioner homeowners who are eligible for benefits are failing to claim any benefit. So make sure you claim what you’re entitled to!

Your home can also be a valuable source of income to support your life after work. There are different ways to do this, but the two main options are downsizing and equity release. And people are increasingly choosing to work part-time in retirement, with more than 1 million people still working past their 65th birthday.

If you want to know more about other income during retirement, this section of Pension Buddy might be a good place to start.

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