Your retirement planning checklist

Whether retirement is years away or just around the corner, it’s never too early or too late to start thinking about what comes next.

The earlier you start planning, the more options you're likely to have. But wherever you are on your retirement journey, taking a few practical steps today could help you feel more confident about tomorrow.

Your retirement age doesn’t have to be set in stone. You might want to retire in line with your State Pension age, or you may prefer to stop working earlier or later.

The State Pension age is currently 66, but it’s rising to 67 from 2028, and could reach 68 between 2044 and 2046. You can check your State Pension age on the government website.

You don’t have to wait for your State Pension to retire. Most personal and workplace pensions can be accessed from age 55 (rising to 57 in 2028). If you’re thinking about retiring early, consider whether your pension, savings and other sources of income could support the lifestyle you want throughout retirement.

On the other hand, delaying retirement could give your pension more time to grow and may reduce the number of years your savings need to support you. If you have a defined contribution pension, speak to your provider to make sure you won’t miss out on any benefits. With a defined benefit pension, there’s usually a maximum age, often 75, by which you’ll need to take your money.

And if you delay your State Pension, you could receive more. For every nine weeks you wait, your pension increases by around 1%, which adds up to nearly 5.8% extra per year.

Retirement looks different for everyone. To understand what you’ll need, ask yourself:

• Will your income cover your regular outgoings?
• Do you want to maintain your current lifestyle?
• Will you need extra for holidays or hobbies?
• Are you planning to leave money to loved ones?
• Do you need to factor in care costs?

While it's impossible to predict exactly what your retirement will cost, having a realistic estimate can help you identify whether you're on track or if you may need to save more.

Pensions UK offers helpful benchmarks. The Retirement Living Standards show what life in retirement could cost, based on three different levels of spending. They include examples of typical everyday costs and the kinds of things you might be able to afford at each level.

Retirement often means juggling multiple income sources. You might have:

• Workplace pensions from previous jobs
• Personal pensions
• ISAs or savings accounts
• Property or other investments

Since Auto-Enrolment began in 2012, most employees are automatically enrolled in a workplace pension. If you’ve changed jobs over the years, you may have several pension pots.

Keeping track of your savings helps you plan more effectively. And if you’re unsure what pensions you have, the government’s free Pension Tracing Service can help you find them.

Managing multiple pensions can be complex and potentially costly. Having several pension pots can also make it harder to keep track of your investments, charges and overall retirement income. Consolidating them into a single pot might make things simpler and reduce fees, but it’s important to weigh the pros and cons before making a decision.

Potential benefits:

• Easier to keep track of your savings and investment performance
• One set of charges instead of multiple
• A clearer picture of your overall retirement income

Things to watch out for:

• Some pensions may have valuable benefits—such as guaranteed annuity rates or protected tax-free cash—that you could lose if you transfer them
• There may be exit fees or transfer charges
• Investment options and service levels can vary between providers

Before consolidating, it’s a good idea to check the details of each pension and consider speaking to a financial adviser to make sure it’s the right move for you. While bringing pensions together can simplify retirement planning, it won't be suitable for everyone.

Under Auto-Enrolment, you’ll usually contribute at least 5% of your qualifying earnings, with your employer adding a minimum of 3%. But if you can afford to contribute more, it could make a big difference. Even small increases in contributions may have a meaningful impact over time thanks to the benefits of long-term investing and compound growth.

It's also worth reviewing your contribution levels regularly, particularly after a pay rise or change in circumstances, to make sure you're making the most of available tax benefits and employer contributions.

Some employers match additional contributions up to a certain limit. And if you’re eligible, you’ll get tax relief on contributions up to £60,000 or 100% of your salary (whichever is lower).

When it’s time to access your pension, you’ll have choices. The first 25% is usually tax-free, and how you take it depends on your preferences.

• Annuity: Provides a guaranteed income for life or a set period.
• Drawdown: Lets you withdraw money flexibly while keeping the rest invested.
• Combination: You can mix approaches to suit your needs.

Each option has tax implications, so it’s worth considering how your choices affect your overall income. The right option will depend on your circumstances, objectives and attitude to investment risk.

Making the wrong decision can have lasting consequences, so many people choose to seek professional advice before accessing their pension benefits.

Here’s a quick summary to help you get started Regularly reviewing your plans can be just as important as creating them in the first place, helping ensure your retirement goals stay aligned with your changing circumstances:

• Decide when you want to retire
• Calculate how much money you’ll need
• List all your savings and investments
• Trace any lost pensions
• Consider increasing your contributions
• Explore combining your pensions
• Choose how you’ll withdraw your pension

If you’d like help shaping your retirement plan, we’re here to support you. At Lloyds Wealth, we believe in clear, confident conversations that help you feel in control of your financial future.

Whether you're reviewing existing pensions, considering your retirement income options or simply wondering if you're on track, our advisers can help you understand your choices and build a plan that's right for you.

This article is for information purposes only. It is not intended as investment advice.

Fees, charges and eligibility criteria apply.

The retirement benefits you receive from your pension plan depend on a number of factors including the value of your plan when you decide to take your benefits which isn't guaranteed and can do down as well as up. The benefits of your plan could fall below the amount(s) paid in.

Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

In preparing this article we have used third party sources which we believe to be true and accurate as at the date of writing but can give no assurances or warranty regarding the accuracy, currency or applicability of any of the contents in relation to specific situations and particular circumstances.

Any views expressed are our in-house views as at the time of publishing.  This content may not be used, copied, quoted, circulated or otherwise disclosed (in whole or in part) without our prior written consent.