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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 your pension pot could miss out on greater potential for growth, as it will be invested in less volatile fund(s) for longer than intended under your chosen lifestyle profile. However, it may mean your investments aren't subject to the same changes in value than in more volatile fund(s) - there is lower potential for loss.
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 could experience significant ups and downs in value, as it 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.
How you'll take your retirement income
You can take flexible income, guaranteed income, cash, or a combination of these. Remember that you can mix and match options too.
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 options that automatically move your money into funds aimed at aligning your pension savings with your plans for retirement.
Increase your retirement income
Now you’re on the countdown to retirement, you could consider giving your savings a boost.
Approaching retirement: One year to go
Decide how to turn your pension savings into income
You may be able to take up to 100% of your DC Top-up Section as a tax free lump sum when you retire.
With the balance of your DC Top-up Section 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 guaranteed 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.
Got more than one pension?
You might want to consider pulling all your pensions together. Having all your pensions in one place could make it easier to plan and to see how much you’re likely to have once you stop working.
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 arrangement, will send you a quote when you’re 6 months away from retiring. This will include your main scheme, DC Top-up Section and any AVC plan benefits.
Unless you’ve been in touch to tell Standard Life 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 call Standard Life 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 (opens new window)
You need to make some final decisions:
- Decide when you’re going to retire and tell Standard Life the date - because if they don’t hear from you, they’ll assume that you’ll retire on the day before your 75th birthday
- Decide if you want to take a flexible income or buy a guaranteed income (an annuity)
- Decide if you want to take a cash lump sum, and how much you'd like to take
If you want to purchase an annuity with your DC Top-up Section or any AVC savings, make sure you look at several different providers and shop around to get the best deal.
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.