Planning for your retirement

Published by Kim Williams on 11 August 2023

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I receive many questions about retirement planning and the most common ones are:

  • How much do I need to save to fund my retirement?
  • Is my pension pot at a good level given my age?
  • How much should I be paying into my pension?
  • What will my pension provide me with when I retire?

However, the answer is not that simple as it depends on a number of factors:

What age you want to retire

  • In line with state pension or earlier

What your retirement expenditure will be

  • Take your expenditure now and remove any outgoings which will stop i.e. mortgage. Add in additional costs, such as more holidays or a new car

Will you use income drawdown or purchase an annuity

  • Income drawdown; your pension remains invested and you can drawdown income as you need it. The danger is that you could draw too much and run out of money
  • Annuity; you pass the pension capital to an insurance company who promise an income to be paid for the rest of your lifetime. You can add in a spouses annuity at an extra cost

Can you afford to save the maximum into pensions now to achieve your long term goal

  • You receive income tax relief on your contributions into pensions
  • The money is locked into a pension arrangement until you are age 55 (increasing to age 57 from 2028)

This illustration has been sourced from Which?

Most of us will want a ‘comfortable’ retirement so the average spending for a two person household is £28,000 gross a year.  If you are looking for a more luxurious retirement to include larger holidays, home improvements and a new car frequently then a two person household will need £44,000 a year gross.

Check your state pension forecast to ensure that you are ‘on track’ to receive the full state pension.  This is currently £10,600 so a couple could achieve a retirement income of £21,200 a year from the state alone.  This could cover your essential expenditure but saving personally into pensions means that you will have a better lifestyle and more choices when you retire.

The table below sets down the value of your pension needed to achieve these different levels of lifestyle as provided by Which?.  I have assumed that any tax free payment is made (i.e. 25% of your pension fund) which gives you a cash buffer for any emergencies.

Lifestyle Annual Net Expenditure* State Pension** Private Gross Pension income Private Pension Fund size required
Essential £13,000 £10,600 £2,510 £73,500
Comfortable £20,000 £10,600 £11,266 £313,000
Luxury £32,000 £10,600 £26,300 £734,000

*Based on a single person household

**Assumes full state pension is accrued (23/24 figures)


  1. 1) Full tax free cash is taken and an annuity is purchased
  2. 2) You are in good health
  3. 3) Aged 67
  4. 4) Annuity includes a 50% spouses income and a 10 year guaranteed period
  5. 5) Annuity Increases by 3% a year
  6. 6) The personal allowance is £12,570 (23/24 tax year)

Please note that these annuity rates were correct on 28th June 2023.  They are not guaranteed and will move up and down.

Many of our clients are wanting to retire earlier than their state pension age.  If this is the case then saving additional amounts into private pensions is key to planning your retirement income.  You may decide to retire from your current role and phase into your retirement by opting to carry out a different part time role.  This can sometimes bridge the gap between semi-retirement and your state pension being paid.

It is not all about pensions.  Your retirement income can be funded from other assets such as a buy to let property, an investment portfolio or simple savings accrued in the bank.  We can prepare a financial plan using all of your assets to ensure that your needs can be met.


For advice around retirement savings please contact our Financial Planning team on +44 (0) 330 124 1399 or provide your details on our online enquiry form.


The content of this article is for information only and does not constitute formal financial advice. This material is for general information only and does not constitute investment, tax, legal or other forms of advice. You should not rely on this information to make, or refrain from making any decisions. Always obtain independent, professional advice for your own particular situation.

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