Don’t miss out. Make sure your pension’s retirement date is in line with your plans.
It used to be fairly standard for people to retire at similar ages, typically 60 or 65. But things have changed a lot, mostly due to three key developments:
- Rising State Pension age. Since 2010 the age people become entitled to the State Pension has been changing to reflect rising life expectancy. And since 2018 men and women’s State Pension ages have been rising together. They’re currently set to hit 68 in 2039. If you’re unsure about your State Pension age, find out using the government’s State Pension calculator.
- End of workplace retirement ages. Nowadays it’s against the law for employers to terminate someone’s employment just because they reach a certain age 1. This has helped increase the number of people working in later life, with more than 1 million aged 65 and over now in work 2.
- Pension freedoms. People now have a range of options for accessing their private pensions from age 55 onwards (increasing to 57 in 2028), giving far greater flexibility than previously. Since 2015 more than 1.4 million people have used these new ‘freedoms’ 3, helping to change the traditional approach to retirement. If you’re 50 or over you can get help understanding your options from the government’s free Pension Wise service.
Your retirement date and why it matters to your pension
When you take out a personal pension, it’s usually set up with a specific retirement date, sometimes called the normal, standard, or nominated retirement date. This is purely a guide – you’re not bound by it. As life changes, retirement plans often do too. By keeping your pension in line with your plans, you can stay better informed and help make sure your money is appropriately invested.
- Stay informed. If you check and, if necessary, update your retirement date, your pension provider can make sure you get the right information at the right time. This will help when you’re making decisions about what to do with your pension, whether that’s continuing to save, changing your investments, starting to access your money, or any combination of these.
- Suitable investments. The value of your pension can go down as well as up, and you may get back less than has been invested. So, as people get closer to retirement, many switch the funds in which their pension is invested to less risky ones. This potentially reduces the effect of falls in the markets as retirement approaches. Many pensions, in particular workplace schemes, automatically change how your money is invested as you get nearer retirement. If this is the case with yours, it’s especially important that your retirement date is realistic. If your pension starts to switch its investments too soon or too late, it could have a negative effect on the value of your pension pot when you decide to access it.
How to change your date
To check and change your retirement date, speak to your pension provider. You may even be able to do it online. You should also be able to check how your pension is invested.
If you’re thinking of making changes to your pension, or when the time comes to make decisions about how to access it, we recommend you speak to your financial adviser. If you don’t have an adviser, we can help you find one. Call us on 0800 015 8379, Monday to Friday 9am-5pm. Calls may be monitored and recorded.