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Uncertain about retirement? Here are three tips to help

Feel confident about retirement and taking your pension? Here are three tips to help you feel more confident about retiring.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

We’re all trying hard to keep our spirits up at the moment. But because markets are turbulent, you might expect retirement confidence levels to be low this year.

In September, we asked 2,000 people from across the country questions about their retirement plans. One in three said they were confident they could afford to retire. And two out of every five said they expect to retire before or at the age of 65. Both of these figures are higher than last year, which is great considering recent events.

Confidence depends on where you are

Across the country, retirement confidence levels vary.

Londoners are most confident with just under half saying they’re confident they’ll be able to afford to retire.

At the other end, just one in five of those in Northern Ireland felt as confident.

How retirement confidence changes across the country

Response to the statement 'I'm confident I'll be able to afford to retire' by region

Source: HL Survey September 2020.

Though we’re pleased with the increase in confidence, we would still love for that figure to be higher. Here are a few ways you can start feeling more confident about your retirement.

This article and our tools aren’t personal advice. If you're not sure if an investment is right for you make sure you ask for advice.

Check if you’re on track

Knowing when you want to retire and how much income you’ll need is key to feeling confident about your retirement. Our survey found that over one in three had planned what age they wanted to retire.

Setting your retirement age will help you understand how long you’ve got to reach your target. Then you can go on to adjusting your strategy if you need to. You might even find you’ve nothing to worry about. Remember though, you can’t normally access money in a pension until age 55 (57 from 2028).

Use our pension calculator for help in checking if your pension’s on track.

Our calculator is only a guide. If you’d like a more accurate view of whether you’re on track, we also offer financial advice.

Tot up your retirement expenditure

When you total up your essential retirement expenditure, you’ll have a better idea of how you’ll be able to afford to retire.

You might actually find that your essential outgoings are lower than you expected.

Of course, no one wants to just ‘get by’ in retirement, so you should also think about all the things you’re excited to do when you retire. Crucially, you should also think about when you might want to do those things.

When our advisers speak to clients they often draw up a financial time line. This helps visualise how much expenditure will be needed and when. Why not try this yourself?

Find out about your retirement income options

Once you know how much you’ll need, you’ll want to feel comfortable that you know where that income is going to come from.

Broadly, there are three options:

  • Annuities – swap money in your pension for a guaranteed income for the rest of your life.
  • Drawdown – keep your pension invested. Take the income you want, when you want.
  • Lump sums – keep your pension invested. Take the lump sums you want, when you want.

There are advantages and disadvantages to each of these options and the right one or combination will depend on your circumstances.

More on retirement options

Build your confidence with help from HL

Our pensions and retirement section has lots of information on your retirement options and how to prepare for it.

Pension Wise can also help. It’s a free and impartial government service to help you understand your options.

If you’d like more personalised advice, our team of financial advisers could help. If you think financial advice could help you, our advisory helpdesk is your first port of call.

They’ll answer all your questions about our service and ask a few of their own to help you decide if our advice service could help boost your confidence and achieve your retirement goals.

They won’t give any personalised advice, but they’re essential for making sure our service is right for you and explaining our charges.

Find out more by booking a call.

Find out about financial advice

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Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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