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    Planning ahead

    Saving for retirement

    Retirement may still seem a long way off, especially if you are under 50, and there may be other things competing for any extra money you earn –holidays, children heading off to university or supporting elderly relatives –but putting money away into a pension is just as important.

     What are the benefits of a pension?

    Pensions are a tax efficient way of saving for your retirement. You don’t pay income tax on the money you pay into your pension or on the amount it grows. You can also take a quarter of your pension pot as a tax-free lump sum when the time comes to retire. It’s worth remembering that tax treatment depends on your individual circumstances and these rules may change in the future.

    How do I save for my retirement?

    The most popular pension route is to invest in a pension. You can either set up a private pension yourself, or pay into a workplace pension scheme set up by an employer. If you pay into a workplace pension scheme, the amount you choose to contribute is often met by the same contribution (up to a set limit) by your employer – so your savings grow even more quickly.

    Did you know?

    The full State Pension is currently around £9,100 per year, however many people find this isn’t enough to fund a comfortable retirement.

    Have you thought about how much you need to retire?

    https://www.scottishwidows.co.uk/retirement/retirement-explained/approaching/can-you-afford/

    Your questions answered

    • Pension money is invested and your investments can go down as well as up, meaning you could get back less than you invested. The idea is that this pattern of ups and downs balances out over time, which is why investing for your retirement is a long-term plan.

    • On average, a person will have multiple jobs over the course of their working life. If you’re part of a pension scheme at each job, that means you could end up with pension pots all over the place. If you’re self-employed, you may have different pension pots depending on if you’ve worked for a company or pay into accounts privately. You can choose to combine your pension pots or keep them separate, but it’s worth considering the pros and cons of each option carefully. Keeping tabs on your different pensions is also important, with estimates that there is almost £20bn in ‘lost’ pensions outstanding*.

      * ABI.ORG.UK

      Visit the pension transfer pages to find out more.

    • It’s never too late to start saving for retirement, so even if life has got in the way, any money you pay into your pension fund will make a difference.

      Our pension payment calculator shows you how different levels of payment can add up and our paying more calculator helps you see how increasing your payments could help you get more at retirement.

    • There’s no longer a statutory retirement age for most jobs, and many pension schemes give you some flexibility over when you can take your money once you reach 55.

    • Our pension options calculator can help you understand how these options would work for you if you were to be retiring now and, although the rules or options may change, they can give you an idea of whether you’re on track with your plans or whether it’s worth topping up your payments. Your pension provider or administrator should be able to give you an up-to-date statement of what your pension could be worth at the retirement age you originally selected. You can also find out what State Pension you may be entitled to.

    • Things may have changed by the time you’re ready to retire, but currently there are a number of options available to you when you decide that the time is right to take money out of your pension:

      • Turn it into a regular taxable income (annuity), so you can always be sure of what you’ll get.
      • Take lump sums (25% tax free) and taxable income from your pension pot as and when you need and leave the rest invested.
      • Take your whole pension pot as a cash sum of which 25% would be tax free but the remaining 75% is taxed along with any other income you may receive. Leave it where it is and continue saving.

    What should I do today?

    Scottish Widows have been helping people plan for retirement for over 200 years. As a part of our Group, they can help you to understand whether your plans are workable to give you the retirement you want and help you make the best decisions for you.

    To find out more about pensions.

    Visit the Scottish Widows website

    If you’d like to combine your pensions we can help.

    Visit our pension transfer pages

    Tools and resources

    Pensions Transfer - if you have more than one pension pot you could combine them into one plan to make them easier to manage

    Pensions Transfer

    Handy Tool - if you’re approaching retirement, review your pension options with our pensions provider Scottish Widows and see how you could benefit

    Pensions Calculator

    Wealth Management Service – if you feel that you’d benefit from some financial advice to plan your retirement, we can help.

    Wealth Management

    Will Writing – to ensure your assets and loved ones are protected in the future it is important to have a will in place which we can help with.

    Making a Will

    Pension Basics - These bite size films are filled with useful information to help you plan for retirement.

    Pension Basics

    Looking for further help?

    Visit the Money Advice Service website for more information. You might want to talk to a financial adviser. Find one near you.

    The Government are offering free guidance on your options online, by phone or face to face from Pension Wise.

    Important legal information

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    Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS).

    Telephone calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help us improve our quality of service.