Start your pension to boost your income in retirement.

Could you live on less than £8,000 a year?

If you were retiring today, that’s what you’d have to survive on if you hadn’t made any financial arrangements for your retirement. Scary, isn’t it?

In April 2016, the government introduces a new state pension. While the final rate is yet to be set, in our opinion it is unlikely to be much higher than the minimum level they have set of £148.40 a week (or £7,738.00 a year). That’s the amount you’d have to get by on a year if you don’t have a pension of your own to boost your income.

Let’s talk numbers

To put that into perspective, according to the Office of National Statistics, the current average UK wage is £27,000 as at November 2014.

The Money Advice Service recommends using between half and two thirds of your salary as a useful rule of thumb when planning for your retirement needs. Half the UK average wage is £13,500.

The difference between the state pension and just half the UK average wage is still £5,762 per year.

How do pensions work?

We’ll give you a very quick overview of pensions here, but to find out more about Aviva Pension, the pension available through this website, please visit the Aviva Pension page.

What is a pension?

A pension is an investment specifically designed to help you build up a pot of money for your retirement.

Typically, you pay into your pension and pick funds to invest your money in. You can typically choose from a wide range of funds, offering different levels of growth and risk. The value of investments in funds can go down as well as up.

Under current rules, you can’t touch any money you tuck away in your pension until you’re at least 55 years old.

There are other types of pension where all the investment decisions are made for you and the benefits you receive at retirement are pre-defined. These defined benefit pensions are not available from Aviva.

Paying into your pension

Most people make regular payments into their pension. Usually, you’d make monthly payments, coinciding with when you get paid. However, you can choose to make less regular or one-off payments.

Get more money from the government

Subject to certain limits the government gives you tax relief on your pension payments. Under current tax rules, this means for every £80 you pay into your pension, the government will pay in £20 if you're a lower rate tax payer. If you pay higher or additional rate tax, you can claim the difference through your tax return or by contacting HMRC.

Tax relief helps you build up your pension pot more quickly and at less cost to you. Please bear in mind that tax rules may change in the future.

Your employer can pay into your pension

Your employer can also make payments into your pension.

It’s worth checking with your employer if there’s a company pension scheme. If there is, it’s possible that your employer will pay in a certain amount of money as long as you agree to pay in a minimum amount into your pension every month.

Every employer will have to have a company pension scheme into which they'll automatically enrol all eligible staff. If your employer, doesn't currently have a pension scheme, ask them when they expect to have one up and running.

What happens to your pension when you retire?

You’ve got several options when you retire. You can usually take up to 25% of your pension as cash without paying any tax on it. You can use the rest of your money to give you an income for the rest of your life. There are several ways you can do this, including using the money invested in your pension to buy an annuity or drawing an income directly from your pension.

The rules around what you can do with your pension at retirement are changing in April 2015. You can read more about your retirement options.

What could I be doing?

Born in the 90s?

  • You’re only just starting your working life, so you’ve got plenty of time to invest in your pension
  • You can make smaller payments than someone 10 years older than you as your money has the potential to grow for longer.
  • Still, it’s wise to start paying in as soon as you can even if it’s just to get into the habit of putting money away every month. So why not start as you mean to go on?
  • Your life expectancy is 93 if you are male and 95 if you are female.
  • To get just half the UK average wage when you retire, you need to invest £165 a month into your pension.
  • Please note that the contribution shown here doesn't guarantee the return stated.

View the assumptions made to get this figure

These assumptions are based on:

  • Male aged 20
  • No current pension savings
  • Payments made every month until retirement at 65
  • 25% tax-free cash taken from the pension at retirement
  • Income of £5,762 assumed to last from age 65 until male life expectancy.
  • Fund growth estimated as 2.4% above inflation per year
  • Pension and fund charges total 0.75% per year.

These are general examples and do not relate to any particular pension product. Figures are calculated using My Retirement Planner

Born in the 80s?

  • As you move from your carefree twenties into your thirties, it’s time to start thinking about your future.
  • The sooner you start paying into your pension, the better as your money will have the potential to grow for longer.
  • You’ll need to pay in more each month than you would if you’d started your pension when you were younger to get the same amount of retirement income.
  • Try to pay as much as you can afford into your pension, but bear in mind that you can’t touch that money until you’re at least 55 years old.
  • Your life expectancy is 92 if you are male and 94 if you are female.
  • To get just half the UK average wage when you retire, you need to invest £240 a month into your pension.
  • Please note that the contribution shown here doesn't guarantee the return stated.

View the assumptions made to get this figure

These assumptions are based on:

  • Male aged 30
  • No current pension savings
  • Payments made every month until retirement at 65
  • 25% tax-free cash taken from the pension at retirement
  • Income of £5,762 assumed to last from age 65 until male life expectancy.
  • Fund growth estimated as 2.4% above inflation per year
  • Pension and fund charges total 0.75% per year.

These are general examples and do not relate to any particular pension product. Figures are calculated using My Retirement Planner

Born in the 70s?

  • Now, you really have to give some serious attention to your pension.
  • Retirement may seem a long way off, but you’re likely to be halfway through your working life already.
  • You’ve lost precious time in building up your pension, but it’s not too late to get started.
  • Look into your options and start paying as much as you can into your pension. You’ll need to pay in more each month than you would if you’d started your pension when you were younger to get the same amount of retirement income.
  • Your life expectancy is 91 if you are male and 93 if you are female.
  • To get just half the UK average wage when you retire, you need to invest £380 a month into your pension.
  • Please note that the contribution shown here doesn't guarantee the return stated.

View the assumptions made to get this figure

These assumptions are based on:

  • Male aged 40
  • No current pension savings
  • Payments made every month until retirement at 65
  • 25% tax-free cash taken from the pension at retirement
  • Income of £5,762 assumed to last from age 65 until male life expectancy.
  • Fund growth estimated as 2.4% above inflation per year
  • Pension and fund charges total 0.75% per year.

These are general examples and do not relate to any particular pension product. Figures are calculated using My Retirement Planner

Born in the 60s?

  • If you haven’t yet started paying into a pension, you may have to adjust your visions of a comfortable retirement.
  • You may even have to think about working longer than you would like to.
  • It’s not too late to start a pension. After all, any pension is better than no pension. You’ll need to pay in much more each month than you would if you’d started your pension when you were younger to get the same amount of retirement income.
  • If you have several small pensions from various jobs, it’s worth looking into combining them.
  • Your life expectancy is 89 if you are male and 91 if you are female.
  • To get just half the UK average wage when you retire, you need to invest £690 a month into your pension.
  • Please note that the contribution shown here doesn't guarantee the return stated.

View the assumptions made to get this figure

These assumptions are based on:

  • Male aged 50
  • No current pension savings
  • Payments made every month until retirement at 65
  • 25% tax-free cash taken from the pension at retirement
  • Income of £5,762 assumed to last from age 65 until male life expectancy.
  • Fund growth estimated as 2.4% above inflation per year
  • Pension and fund charges total 0.75% per year.

These are general examples and do not relate to any particular pension product. Figures are calculated using My Retirement Planner

Find out more about your own situation with My retirement planner

Getting started

Understanding Aviva Pension

Check out Aviva Pension
Find out more to apply or transfer your pensions

Aviva Pension

Need more help?

Call us now for more information

If you’re new to Aviva

Call us on 0800 285 1088 for more information

Lines are open Monday to Friday, 8.00am-6:30pm. Saturday, 9.00am-12noon.

Calls from UK landlines and mobiles are free. For our joint protection, telephone calls may be recorded and/or monitored.

Find out how we can help you when you call our team.

If you need some help or information from Aviva, please call our team on the number below. We can help you with:

  • Using our website
  • All the facts about Aviva products and services
  • More details on the options you can choose from when you’re making decisions about your retirement
  • Information on where to find financial advice
    • Although we can’t give you advice, we can put you in touch with an adviser who can talk to you about which financial products or investments may be right for you.
    • Alternatively, you can visit www.unbiased.co.uk to find an adviser in your area.

If we can help you in any of these ways

call us on 0800 285 1088.

Monday to Friday, 8.00am-6.30pm, Saturday 9.00am-12noon

Calls from UK landlines and mobiles are free.

For our joint protection, telephone calls may be recorded and/or monitored.

Understanding your retirement needs

Find out how much you need to save each month to get the income you want in your retirement.

Savings and retirement

Unsure what your options are when you're accessing the money in your pension fund?

You'll find helpful information in the I'm approaching retirement and I'm Retired sections of our website.

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