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Your retirement timeline

Whether your retirement's a long way off or just around the corner, having a clear idea of how to achieve your aims is important.  The timeline below relates to those invested in a defined contribution pension, who are building up a pension pot with their own contributions and possibly their employer's contributions as well.

See what you can do now and in the future to reach the retirement you want.

40 years

About 40 years to go

If you're in your twenties, retirement might seem like it's a lifetime away. But stop a minute and think of how long you could be retired for. With life expectancy well over 80 years old now, you could end up funding a retirement of up to 30 years.

The pandemic has proved that the unexpected can always be around the corner. Putting off your retirement plans until later could be leaving it too late.

What to do now

  • Begin by thinking about the kind of retirement you'd want for yourself:
    • Where would you like to live?
    • Do you think you'll want to travel?
    • What sort of activities and hobbies do you think you'll enjoy?
    • Will you be financially supporting anyone else?
  • Start to consider how you'll fund your retirement by making a plan:
    • Set yourself some goals – think about what age you want to retire, how much income you want, whether you'll do any part-time work.
    • Think about how much you might need to save.
    • Also consider how much you can afford to save now.
    • Remember, even if you think you can't afford to save much, as little as £50 or £100 per month will help build your retirement fund.
    • Return to your plan regularly to check on your progress.
    • Please note, the value of your pension can go down as well as up. You may get back less than invested.

We recommend that you seek appropriate guidance or advice to understand your options at retirement. An adviser may charge for their services. You can visit www.unbiased.co.uk to find an adviser in your area.

20 years

About 20 years to go

If you're aged 35 to 45, you're likely to have plenty to think about already. Your career, your home, your family... busy times.

You've probably also thought about your retirement. You may have a pension, perhaps arranged through your work.

Retirement planning may be more at the back of your mind than the front. But this could actually be the best time to take some time and make sure your retirement plans are on track.

What to do now

  • Contact your existing pension provider(s) to find out what your pension fund(s) are worth.
  • See if you're on schedule to have the income you want when you retire.
  • Review your retirement plan and see if you need to change anything.
    • Think about whether you're paying enough into your pension.
    • If you have more than one pension, would it make sense to combine them?
  • It can be difficult to know what to do about your retirement when it's still so far away. Talking to a financial adviser could help. You may need to pay for their services but it could be a valuable investment.
  • Look at all your financial arrangements together.
    • Your pension is one way to fund your retirement but there are other options. You may want to look at using your home as another source of income, either through downsizing in the future or via equity release. You might also want to investigate how to maximise your savings..

We recommend that you seek appropriate guidance or advice to understand your options at retirement. An adviser may charge for their services. You can visit www.unbiased.co.uk to find an adviser in your area.

10 years

About 10 years to go

Now is the time to do some serious thinking about the retirement decisions you'll need to make.

What to do now

  • Contact your existing pension provider(s) to find out what your pension fund(s) are worth.
  • Take a long, hard look at your plans and check that they're on track.
    • Find details of any pensions you may have lost.
    • Make sure you're including all your pensions - it's easy to lose sight of them all if you've had different workplace pensions during your career.
  • Find out what you'll be entitled to receive from the state, and when.

Most people are entitled to a State Pension - it will be useful to know how much you'll receive.

We recommend that you seek appropriate guidance or advice to understand your options at retirement. An adviser may charge for their services. You can visit www.unbiased.co.uk to find an adviser in your area.

5 years

About 5 years to go

It's not too late to make changes to your pension plans which could help you enjoy a better retirement. This is a good time to think seriously about how long your money may need to last you - we're all living longer and may need more help as we get older.

What to do now

  • Contact your existing pension provider(s) to find out what your pension fund(s) are worth.
  • Think about how much you'll need to live on when you're retired
    • You might not have as many outgoings when you retire, but it's still important to work out what you might be spending money on.
  • Review your plans and consider if you'll have enough income
    • If you're not sure you'll have enough money to live on, take the time to look into delaying your retirement or have another look at your projected outgoings and see if you can reduce them.
    • Make sure you're including all your pensions - it's easy to lose sight of them all if you've had different workplace pensions during your career.
    • Make sure you know what options you have for withdrawing money from your pension, including how it will affect you tax-wise.
  • Your savings and investments could be another source of income for your retirement
    • Making the most of your ISA allowance could help you to save and invest more tax-efficiently. Tax treatment depends on individual circumstances and may be subject to change in the future.
  • Find out what you'll be entitled to receive from the state, and when.
    • Most people are entitled to a State Pension - it will be useful to know how much you'll receive.
  • Think carefully about how long your money may need to last
    • No-one can tell exactly how long they'll live – and most of us probably wouldn't want to! But it's important not to run out of money if you live to be a grand old age.
    • Don't forget care costs. It's likely that many of us will develop age-related conditions, so it's important to factor in the potential cost of at-home or residential care.
  • Consider how to provide for your loved ones
    • Making a will can bring some peace of mind - you know your loved ones will be provided for.

Pension Wise

This government service offers free and impartial guidance on your retirement options, either over the phone or face to face.

Visit Pension Wise

pension wise

We recommend that you seek appropriate guidance or advice to understand your options at retirement. An adviser may charge for their services.  You can visit www.unbiased.co.uk to find an adviser in your area.

Less than 1 year

Less than a year to go

You need to start deciding how you're going to take money from your pension. There's lots to think about.

What to do now

  • Make sure you can afford to retire on the date you've chosen
    • If you look at the figures and decide you need to continue working, make sure you tell your pension provider.
    • Make sure you're including all your pensions - it's easy to lose sight of them all if you've had different workplace pensions during your career.
  • Decide how much you’ll need to live on
    • Make certain you know how much you'll need to live on, including extra expenses.
  • Find out about your retirement options

      From the age of 55 you have four ways to take money from your pension:

    • One - withdraw all your pension money
    • Two - take money whenever you need to
    • Three - use it to buy yourself an income for life
    • Or four simply leave the money where it is. You can make your choices later.
    • You can use any or all of these options at different times, if your pensions allow.
  • Read the information your pension provider sends you
    • You’ll receive statements showing how much your pension is worth, together with your options for taking cash from your fund and/or using it to buy an income.  Your pension provider will usually contact you six months before your retirement date, sending a reminder two months before you retire.
  • Check how much you’ll get from the state
    • It's possible you may decide to retire before you reach State Pension age, but it's worth knowing what this will be. You may also be able to claim other benefits.
  • Consider how to provide for your loved ones
    • Don't forget care costs. It's likely that many of us will develop age-related conditions, so it's important to factor in the potential cost of at-home or residential care.
    • Making a will can bring some peace of mind - you know your loved ones will be provided for.
    • If you're using your pension fund to set up an income, you need to decide if you want any money to go to your dependants after you've died.

Pension Wise

This government service offers free and impartial guidance on your retirement options, either over the phone or face to face.

Visit Pension Wise

pension wise

We recommend that you seek appropriate guidance or advice to understand your options at retirement. An adviser may charge for their services.  You can visit www.unbiased.co.uk to find an adviser in your area.

Pension planning

Pension Planning: The Early Years

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Transcript

Pension planning? Isn’t that something you can worry about later?

The fact is that tomorrow comes around sooner than you think, so by saving more now it could lead to you having a better chance of you enjoying the future you want.

So, where do you begin?

First, find out what you already have, and what you could have when you retire.

There’s the State Pension, of course…

For a single person, the current full State Pension for the 2021/22 tax year is £179.60 per week. You need to have made 35 years National Insurance contributions to get this. Wouldn’t want to live on that? Maybe not. So, what other money would you have to live on?

Think about any money you’re saving in a bank or building society account, or an ISA. Factor that in.

Next, if you have a workplace pension, check how much is being paid in each month.

The benefit of a workplace pension is that you will normally be eligible for tax relief from the government on your personal contributions. So, if you're a basic rate tax payer, every £100 which goes into your pension will cost you £80 from your take home pay.

Next, think about what you’re going to need when you’ve finished working.

To help with retirement planning visit our website. You’ll find videos, calculators and online tools. Our Shape My Future tool can help you get an idea what your future could look like, and what you can do to make changes now.

You need to remember that your pension money is invested to try and help it grow – and, as with any investment, the value can go down as well as up and you may get back less than you put in.

If you want to join or make changes to your workplace pension just get in touch with your employer.

So in summary, find out what you’ve already got; plan how much you might need - and then take action.

Remember, if you really want to make a difference to your future, there’s no time like the present to act.

Tax and state benefits shown are for the 2020/21 tax year. They depend on your individual circumstances and may change. This presentation should not be regarded as giving any form of financial or investment advice. You should not make your decision on the basis of this recording alone. If you have any doubts whether the product is suitable for your needs, you should contact a financial adviser for advice.

Pensions Planning: Building My Savings for the Future

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When you get around to thinking about your finances, what sort of things spring to mind?

A mortgage or car loan? Looking after the family? Paying the bills? Probably not pensions, though.

But the fact is that tomorrow comes around sooner than most of us think…

So where do you begin?

First, find out what you already have, and what you could have when you retire. Your annual pension statement can help here.

There’s the State Pension, of course……

For a single person, the current full State Pension for the 2021/22 tax year is £179.60 per week. You need to have made 35 years National Insurance contributions to get this. Wouldn’t want to live on that? Maybe not. So, what other money would you have to live on?

Think about any money you’re saving in a bank or ISA. Factor that in.

Next, if you have a workplace pension, check how much is being paid in each month.

The benefit of a workplace pension is that you will normally be eligible for tax relief from the government on your personal contributions. So, if you're a basic rate tax payer, every £100 which goes into your pension will cost you £80 from your post-tax pay. This tax relief is limited to the amount you earn in the tax year, or the level of the Annual Allowance whichever is lower.

Next, think about what you’re going to need when you’ve finished working.

To help with retirement planning visit our website. You'll find videos, calculators and online tools. Our Shape My Future tool can help you get an idea what your future could look like, and what you can do to make changes now.

Think about whether you can afford to save some extra money from your salary. Putting aside just a little now could still make a big difference later.

You need to remember that your pension money is invested to try and help it grow – and, as with any investment, the value can go down as well as up and you may get back less than you put in.

That’s why it’s important to keep a close eye on the value of your pension and other investments.

If you want to join or make changes to your workplace pension just get in touch with your employer.

So in summary, find out what you’ve already got; plan how much you might need - and then take action

And remember, however busy you may be right now it’s worth taking time out to think about your future while there’s still time to make a difference to it.

Tax and state benefits shown are for the 2020/21 tax year. They depend on your individual circumstances and may change. This presentation should not be regarded as giving any form of financial or investment advice. You should not make your decision on the basis of this recording alone. If you have any doubts whether the product is suitable for your needs, you should contact a financial adviser for advice. 

Pension Planning: Almost Done Saving

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You’re getting closer to your selected retirement age which means more freedom to do the things you enjoy. To make the most of this new stage in your life you need to give some thought to your options, needs and goals.

So, where do you begin?

First, find out what you already have, and what you could have when you retire.

There’s the state pension, of course.

For a single person, the current full state pension for the 2021/22 tax year is £179.60 per week. You’ll need to have made 35 years National Insurance contributions to get this. Could you manage on that?

Think about any money you’re savings in a bank or building society account, or an ISA. Factor that in.

Chances are, your workplace pension pot will also play a big part in planning the kind of future you’d want for yourself.

On reaching 55, you also have the option to take money from your pension pot.

There are a number of ways to take your money, such as: taking all the money as cash; or taking it as a guaranteed or more flexible income.

Before you make a decision on how to take money from your pension pot, you need to get a clear idea of how much you have in there, and how it’s invested

You’ll find lots of information on retirement planning on our website. It’s brought to life with videos, calculators and online tools to help you see where you are now and plan where you want to be when you retire. If you’d like to learn more about your choices at retirement view our Pensions Freedom video.

If you are over 50, you can get free and impartial guidance on your retirement options on the government’s Pension Wise website at pensionwise.gov.uk or by calling 0800 138 3944.

Before you make any decision, it makes sense to talk to an adviser. Advisers can be found at www.unbiased.com. They normally charge for their services. Or, you can speak to us here at Aviva by giving our Financial Advice Support team a call on 0800 092 3107.

Take a look now – your future self will thank you for it!

Tax and state benefits shown are for the 2020/21 tax year. They depend on your individual circumstances and may change. This presentation should not be regarded as giving any form of financial or investment advice. You should not make your decision on the basis of this recording alone. If you have any doubts whether the product is suitable for your needs, you should contact a financial adviser for advice. 

Pension options

How can I take my pension?

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Nowadays,...

...when going to the cinema,...

...do you notice how many different choices there are to make before we can even view the film?

Do we want Premier Seating?

Do we want the popcorn and drink deal?

Do we want to go extra large?

There’s a lot to think about and the same can be said when considering how we can take money from our pension savings.

When you reach age 55,...

...you are free to take the money you have saved from your defined contribution pension. There are 3 main ways to access your money:

Option 1:

If you prefer the security of a guaranteed income for life,...

...you can use your savings to buy an insurance policy, known as an annuity.

This income may be smaller than with the other options...

...but you won’t have to worry about running out of money in the future. Just be aware that once you’ve bought an annuity you can’t change your mind.

Option 2:

You can take money from your pension as and when you want it and the money you leave in your pot stays invested...

...- as it was when you were paying into your pension. Charges will still be taken but leaving it invested may give it more chance to grow.

There is a risk that the value of your investments could go down. Remember, there is no guarantee that the money will last a lifetime with this option.

Option 3:

You can take all of your money out as cash,...

...but as tempting as that is, you’ll need to think carefully about the tax man...

...and how long your savings will last, as taking large sums of cash...

...could push you into a higher income tax bracket...

...and you could run out of money in the future if you don’t budget carefully.

It is possible to mix the different options too if you want to.

Before you do anything, you can take 25% from your savings tax-free,...

...so you could pay off any debts,...

...travel,...

... or just treat yourself to the small things in life.

The remaining 75% of the savings you will take will be treated like your salary and taxed as income.

You don’t have to do anything with your savings either. You can leave your pension exactly where it is.

It's important to be mindful of scams if reinvesting.  Tax benefits are subject to change and individual circumstances.

Whatever choice you make, it’s worth reviewing the options carefully and getting advice.

You should also shop around and compare the different levels of income you could get from different providers. Here at Aviva, we have dedicated staff available to talk you through your options, so whatever route you choose, we can help you set the scene for the retirement you want.

Pension Wise is a free and impartial service set up by the government for people over 50 with defined contribution pensions.  It will help you understand what your choices are and how they work.

You can receive Pension Wise guidance online, over the phone on 0800 138 3944 or face to face.  Visit www.pensionwise.gov.uk for details.

We recommend you seek appropriate guidance or advice to understand your options at retirement.