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Lockdown grinds retirement to a halt: 4 tips to get things moving again

Did the pandemic force you to change your retirement plans? Here’s a four-step plan to help get the ball rolling again.

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.

The pandemic has affected thousands of people’s working lives. Lots have had their working hours slashed, been furloughed and have even lost their jobs entirely. For some older workers, this has left their much-anticipated retirement plans in tatters. In fact, reports suggest as many as 1.45 million people over 50 are expecting to delay their retirement because of the pandemic.

Thankfully, things are looking a little more positive compared to this time last year. There are predictions suggesting the UK’s due an economic boom and could grow at its fastest rate since 1948 as businesses re-open. It’s also been estimated that an extra £200bn sat in bank accounts could provide a welcome boost to the economy as people and companies start spending again.

With a roadmap taking us from lockdown to relative freedom, now could be a good time to get your retirement plans back on track. Here are four steps to help you get things moving again.

This isn’t personal advice. If you're not sure what's right for you, get free guidance from Pension Wise, or ask for financial advice.

Step 1 – check how much your pension is worth

Whether you’re on track for retirement depends on two things: what kind of lifestyle you want in your later years and whether you’ve got enough to afford it.

The Pensions and Lifetime Savings Association suggest that a single person, living outside of London, could need around £10,200 a year (after tax) for a basic retirement. This covers all your essentials with a little bit of cash left over for fun. If you want more financial security and flexibility at retirement, you’ll need to aim for closer to £20,200 a year (after tax).

To see what your pension (including any State Pension) could pay you at retirement, try our pension calculator. If it’s not enough, or if you want to aim for a higher standard of living in retirement, you might want to think about saving a bit more before you retire. Just remember you usually need to be at least 55 (rising to 57 from 2028) before you can withdraw from your pension.

Step 2 – think about consolidating your pension pots

Bringing all your old workplace and private pensions together could make life much easier. If you have several pension pots dotted around, it means you’ll need to deal with more than one company when you want to take money from your pension.

Having to deal with multiple pension providers can be time-consuming and confusing. Plus, you could end up making your important retirement decisions based on how much each individual pot is worth, rather than what you actually need.

If you’re thinking about transferring a pension, you should check for any guarantees or benefits that might be lost on transfer first. And for any excessive transfer fees too.

You might want to think about choosing the HL Self-Invested Personal Pension (SIPP) as the new home for your retirement savings. You’ll be able to see everything from one online account and choose from the full range of retirement options, including flexible access.

More on transferring

Step 3 – get to know your retirement options now

Pensions are the most flexible they’ve ever been. Having more freedom over how and when you take your pension is great, but so much choice can be overwhelming. That’s why it’s important to get to grips with your retirement options ahead of time.

It’s like planning a once-in-a-lifetime holiday. You wouldn’t just book it the day before you’re set to jet off. You’d take the time to get to know your different options and shop around for a good deal.

Read our guide to compare retirement options and learn about the different risks and benefits you’ll need to consider.

Guide: Your retirement options explained

What you do with your pension is an important decision. We strongly recommend you understand all your options and choose the one that’s right for your circumstances.

From age 50, you can get free, impartial guidance from Pension Wise about your retirement options. If you’ve done your research, compared your options and you’re still unsure what to do, you could get personal advice.

Step 4 - get advice if you need it

If you’ve never thought about financial advice before, retirement is as good a time as any. It’s a milestone you’ll only embark upon once, and the decisions you make could affect the rest of your life. It’s also a time where you’ll likely benefit most.

A financial adviser can help you navigate those vital decisions so you can access your pension with no nasty surprises.

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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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