Our research told us that the pandemic caused a lot of disruption in the UK in terms of retirement planning. Many people nearing retirement age had to rethink their plans and potentially retire earlier than expected. Over 154,000 55-64 years olds opted for early retirement because of redundancy, a reduced income or to reduce the risk of their exposure to Covid-19.
Unprepared for retirement
Having to retire earlier than expected can have a significant impact on the retirement you’re hoping for. Not only does it reduce your retirement income, but leaves you little time to prepare and consider how much you need to enjoy the retirement you want.
Amongst those planning to retire in the next five years, 75% hadn’t checked the value of their pension in the last year. 1 in 3 aren't confident they'll have saved enough for a comfortable retirement.
Confusion to confidence
If you’re considering early retirement, here’s some useful tips to help you gain confidence with your retirement planning:
- We recommend keeping on top of your pensions and regularly check them to make sure you’re on track.
- Check the age at which you can get your State Pension and how much you’ll get. The State Pension for 2023/2024 is £203.85 per week.
- It’s sensible to have an idea of the lifestyle you’d like in your retirement and how much it might cost you. Calculate the pension income you think you'll need for essential and non-essential spending. Our handy budgeting guide might help.
- Once you've done this, you can then work out if you'll have the amount you need in your pension by your desired retirement age.
- Consider increasing your pension contributions. The tax advantages of pensions make them one of the best ways to save for retirement.
- If you’re made redundant near retirement age, consider diverting redundancy payments into a pension. It can be a tax-efficient way to boost your retirement funds.
Help and specialist retirement advice
The Money Helper has some useful information on early retirement and is a good place to start with your planning.
Seeking advice from a qualified financial adviser can help you work out how best to achieve your early retirement goals and make sure you’re on track to meet them.
At LV= we’ve been specialising in providing trusted and regulated retirement advice for over 20 years. Learn more about how our retirement advice service can help you plan for an early retirement and get your pensions ready for the retirement you want to enjoy. You can request a call back from one of our friendly advisers today.
Alternatively you can find an adviser by using unbiased.co.uk.