When you begin thinking about retirement planning, the best place to start is with how much income you think you will need. Generally, very few people require as much income when retired as they did when they were an employee "the mortgage might be paid off, kids will have left home and daily expenditures should have decreased. However , with further free time, you may have some large scale plans for travel or family, and all these plans have to be thought about so that you can set some practical expectations.
Once your own figure has been determined, you can begin to work out where it'll come from. For instance, the state pension is £102.15 a week (for 2011/12), plus there could be money coming in from ISA investments, revenue from property or perhaps some continued paid employment. Moving to a smaller main residence could also release some capital "although house prices can go down as we have seen recently, so it might be a risky thing to be reliant on if that is all that you have.
Once finished nonetheless , you should have a much better notion of what earnings you need to generate from pension savings. You may possibly already have started through a workplace or private pension, and this could be considered, but it is probable you will still need to supplement it, and build it further over the years you have left. To give you an idea, at the best current annuity rates (April 2010), given rates are so low, £10,000 of annual salary will cost a male aged 65 over £150,000 - with no guarantees. If you are female or would like some inflation protection - or would like to retire sooner than that - the cost is higher yet. The amount you want to save could then be substantial.
When arranging your retirement, it's very important to take into account all the options open to you. One option that's proving increasingly popular is that of taking an early pension release. If you are are age 55 or over, you are allowed to take anywhere up to 25% of your total allowance amount completely tax free (although this will have an effect on your income in retirement). A sum like this will allow you greater freedom choices in life, all before your actual retirement age.
With so many pension products and options on the market, it's important you do your preparation. You only retire once and it's important that you settle on the right product for you and your family.
Once your own figure has been determined, you can begin to work out where it'll come from. For instance, the state pension is £102.15 a week (for 2011/12), plus there could be money coming in from ISA investments, revenue from property or perhaps some continued paid employment. Moving to a smaller main residence could also release some capital "although house prices can go down as we have seen recently, so it might be a risky thing to be reliant on if that is all that you have.
Once finished nonetheless , you should have a much better notion of what earnings you need to generate from pension savings. You may possibly already have started through a workplace or private pension, and this could be considered, but it is probable you will still need to supplement it, and build it further over the years you have left. To give you an idea, at the best current annuity rates (April 2010), given rates are so low, £10,000 of annual salary will cost a male aged 65 over £150,000 - with no guarantees. If you are female or would like some inflation protection - or would like to retire sooner than that - the cost is higher yet. The amount you want to save could then be substantial.
When arranging your retirement, it's very important to take into account all the options open to you. One option that's proving increasingly popular is that of taking an early pension release. If you are are age 55 or over, you are allowed to take anywhere up to 25% of your total allowance amount completely tax free (although this will have an effect on your income in retirement). A sum like this will allow you greater freedom choices in life, all before your actual retirement age.
With so many pension products and options on the market, it's important you do your preparation. You only retire once and it's important that you settle on the right product for you and your family.
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Information thanks to Adviser Hub. Before you make any final decision regarding purchasing an unsecured pension or taking an early pension lump sum, we do suggest that you complete a full pension review with the assistance of a certified pensions adviser.
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