Retirement - what to think about and when

Your step by step guide

You've worked hard for your retirement. So whenever you plan to access your pension pot - after you turn 55 (may be subject to change) - make sure you set aside a little time to find out everything you need to know. This will help to put you in control of the life you lead when you stop working.

Here's our guide to what you should be thinking about and when.

5, 10 or more years to go
Make sure your investment choices are appropriate for how you plan to take your retirement income. It's a good idea to check that your retirement plans are on track for your selected retirement date.

One year to go
When you’re just a year away, start thinking about how to access the money in your pension pot.

Ten weeks to go
Now it's time to make your final choices about your pension - and get ready for life in retirement.

 

Approaching retirement: 5, 10 or more years to go

It’s time to start thinking about getting everything lined up for your retirement.

Work out when to retire

Now is a good time to start thinking if a retirement date of between 5 and 10 years away is right for you.

When you decide on a date, you should let Standard Life - and any other pension providers you have - know. That way they can offer the right help at the right time.

If you're invested in a lifestyle profile, then it is important that your plan's selected retirement date matches the actual date you plan to retire. That's because the lifestyle profile will work towards your
selected retirement date, moving your pension pot into investment funds that aim to align with your retirement income plans.

So, if your selected retirement date is earlier than the date you plan to retire, the lifestyle profile will move the investments in your pension pot too early. That means you would miss out on any potential
growth, as your pension pot will be invested in less volatile fund(s) for longer than intended under your chosen lifestyle profile.

On the other hand, if your selected retirement date is after the date you plan to retire, then the lifestyle profile would be late in starting to move the investments in your pension pot. That means
your pension pot would be invested in more volatile fund(s) for longer than intended under your chosen lifestyle profile.

You can change your selected retirement date through online servicing.

Check you’re on target

It's good to have an idea of how much money you'll need when you retire. You should also check more regularly - at least a couple of times a year - that you're saving enough to give you the lifestyle you want.

It's also a good idea to start gathering together all your pension and savings paperwork so they are in one place for easy access.

Find out how much you'll need

How you'll take your retirement income

You can take a flexible income, fixed income, take cash - or a combination.

Compare your income options

Preparing your pension savings for retirement

Depending on what your money is invested in and how you plan on taking your income, you might want to think about reducing risk as you approach retirement.

Or you might want to consider the Centrica Gateway Strategy that automatically moves your investments into funds that are more appropriate as you approach retirement.

Start thinking about how to turn your pension savings into an income

You may be able to take up to 100% of your AVC plan as a tax free lump sum when you retire. This doesn't apply to members of the Centrica Pension Plan who can normally take up to 25% as a tax free lump sum.

With the balance of your AVC plan after you take a lump sum, you can set up an income to live on in retirement.

You may be able to take flexible income or fixed income as well as cash. You may have to transfer to a new plan to take advantage of some options - and you can shop around to find the right plan for you. 

 

Approaching retirement: One year to go

It’s time to make some important decisions about your retirement. If you need any help, please get in touch or seek financial advice. There may be a cost for financial advice.

Decide how to turn your pension savings into income

You may be able to take up to 100% of your AVC plan as a tax free lump sum when you retire. This doesn't apply to members of the Centrica Pension Plan who can normally take up to 25% as a tax free lump sum.

With the balance of your AVC plan after you take a lump sum, you can set up an income to live on in retirement.

You may be able to take flexible income or fixed income as well as cash. You may have to transfer to a new plan to take advantage of some options - and you can shop around to find the right plan for you.

Our retirement pathfinder can help you get a quick and easy snapshot of your options.

Compare income options

Extra sources of income

You may be eligible for state benefits when you retire. And you might want to supplement your pension by working part-time.

 

Approaching retirement: Ten weeks to go

It’s time to make some important decisions. They’re decisions that will affect the rest of your life - so take the time to make sure you understand everything.

Get retirement quotes

Mercer, the administrator of your main Centrica pension, will send you a quote when you’re ten weeks away from retiring. This will include your main scheme and AVC plan benefits.

Unless you’ve been in touch to tell Mercer your personal circumstances, this quote won't be personalised with your retirement preferences.

It’s a good idea to:

  • Figure out what preferences you'd like and contact Mercer for a personalised quote
  • Get up to date quotes from your other providers if you have more than one pension
  • Ask for a state pension forecast at gov.uk

If you want to purchase an annuity with your AVC plan, make sure you look at several different providers and shop around to get the best deal.

Final decisions

You need to make some final decisions:

  1. Decide if you want to take a lump sum, and how much you’d like to take
  2. Decide if you want to take a flexible income or buy a fixed income (an annuity)

If you want to talk through your options seek financial advice.

 

 Are you approaching retirement?

Access to impartial guidance

We recommend you seek appropriate guidance or advice to understand your options at retirement. You can get free guidance over the phone or face to face with Pensionwise.

Go to www.pensionwise.gov.uk or call 0800 138 3944.

The Money Advice Service (MAS) guide is also available on the Pensionwise site.