information

We use cookies to give you the best possible experience online. By continuing to use our website, you agree to receiving our cookies on your web browser. Visit our cookie policy page to find out more and how to change your cookie settings.

skip to main content

Budgeting for retirement

Call us for a free chat on 0800 032 9301

Lines open: 8.30am to 6pm Monday to Friday

Calculate your retirement budget

Calculating your monthly budget in retirement can be a difficult process, but understanding your costs can help you better plan your finances.

Image alt text

1. Review your current outgoings

Firstly, it's time to review your current spending habits, and categorise them accordingly.

Essential expenses

  • Food and household shopping
  • Mortgage and rent payments
  • Health related costs
  • Household utility bills
  • Insurance costs

Optional expenses

  • Eating out
  • Holidays and day trips
  • Hobbies such as gardening or sports
  • Pets
  • Running a car
Image alt text

2. Adjust your outgoings for your retirement

Consider how your spending habits might change once you retire. Consider whether your mortgage will be paid by the time you retire, and any additional money you may spend on leisure and hobbies.

Image alt text

3. Calculate your pension income

Use our pension income calculator to find out what income your pension could give you and find out how consolidation your pension pots could boost your savings.

Image alt text

4. Check if you'll eligible for the State Pension

Consider how your spending habits might change once you retire. Consider whether your mortgage will be paid by the time you retire, and any additional money you may spend on leisure and hobbies.

Image alt text

5. Boost your income

With your estimated outgoing in retirement, pension income calculation and state pension, you'll be able to see if there's a shortfall. If there is (and even if there isn't) take a look at our tips on how to boost your retirement income.

Things to consider

Life expectancy and inflation

It’s important to consider how long your retirement might last and the impact inflation may have on your income:

  • A male aged 65 can expect to live on average 21 years; a woman over 23 years. [1]
  • At 3% per annum inflation, the value of your money almost halves over 20 years.

The means you will probably need to use all your sources of income. These could include personal and company pensions, state pension, savings and investments (ISA's), equity in your home and other income such as inherited wealth to support you in retirement.

[1] ONS statistical Bulletin (2014), Cohort life expectancy at age 65.

Have a commitment free chat with a Pension Specialist

Call us on 0800 032 9301

TextDirect: First dial 18001

Lines open: 8.30am to 6pm Monday to Friday. We may record and/or monitor calls for training and audit purposes.

Start your conversation with a pension specialist today by telling us about:

  • Your current pension pots
  • Any contributions you're making
  • How much you've already saved