Financial health check: building for retirement

The earlier you start to plan for the retirement you want, the greater your chance of achieving the retirement income and lifestyle that you want.

As you build for retirement, here are some of the things you will need to check:

Your pension pot

  • Find out how much state pension you will be entitled to. The State Pension is based on the number of years you have worked and contributed National Insurance. Read our guide to the State Pension for more information.
  • Find out how much your pension pot is currently worth. Work out how much you’ve got and check whether you’re on track to meet your goals for retirement income.
  • If you’re not sure where your pension pot is (many people have more than one pot, or pension savings that they’ve lost track of), the government offers a workplace pension tracing service.
  • If you’re not sure what your goals are, it’s time to do something about it! What level of income will you need to achieve the lifestyle that you want? A financial adviser can offer bespoke advice on setting goals for retirement and putting a plan in place to achieve them. Use our pension calculator to estimate what income you could expect based on your current savings.
  • Check your pension investments suit your circumstances. As you approach retirement, for example, you may want to reduce the amount of risk your investments are exposed to.

Savings and Investments

  • Are your savings are earning as much interest as possible? If you pay into saving accounts to help fund your retirement, make sure you're getting the best rate possible. Compare savings accounts and consider using your ISA allowance to save tax on any interest you earn.
  • Check you’re not missing out on a better return. If you’re able to put money away for a minimum of five to 10 years, investing may offer better potential returns in return for exposing your capital to risk. Read our guide to investing for beginners or speak to a financial adviser for more information.

Your home

  • Could equity release or downsizing give you access to extra cash? If you’re planning on downsizing or releasing equity from your property to generate income in retirement, now's the time to look into the detail. Could you manage in a smaller property? Have you considered the benefits and drawbacks of releasing property? Read our guide to equity release for more information.
  • Compare utility providers. Get the best deal for your needs by shopping around and comparing regularly.

Turning your pension pot into an income

  • Research how you can turn your pension pot into an income. Options include pension drawdown and annuities. Start comparing options early so when the day comes you’ll be well prepared. If you need help you may want to speak to a financial adviser.

Getting your assets in order

  • Make a will. A will allows you to decide how your assets are distributed when you die. Read our guide to wills for more information.
  • Consider inheritance tax. If your estate is worth more than £325,000 (£650,000 for couples), consider how Inheritance Tax will affect what you leave behind and plan ahead to get the most out of your estate.

A financial adviser can help you set achievable retirement goals and ensure you’re on course to meet them.

Last updated: 10 June 2015