Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Easy ways to get paid the maximum when you retire.
Jasmine Birtles
1st Apr 2024
So, you’re over 50 and it’s starting to feel like retirement is suddenly round the corner.
You may already be thinking about the State Pension you will receive. Certainly things are looking a little better for those who rely on this in retirement. The Chancellor has increased it by 8.5% so that will help a bit to meet the cost of living (though not by much).
For most people though, it’s their personal or company pensions, and other investments, that will really make the difference to their income.
In fact, right now you can dip into these private pension pots by the time you’re 55 if you want to retire early – and have the investments to enable you to do so.
That age will go up to 57 by 2028, although not for everyone as some jobs are not affected by the change. Find out what it means to you in this article on the gov.uk website.
Whatever your planned retirement age, though, as you move towards it there are various decisions that need to be made – decisions that could affect your wealth for the rest of your life.
Prepare for retirement step-by-step
Here’s a checklist of what you should do to prepare for retirement as you move towards it:
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Give yourself a financial health-check
Dig out any paperwork you have on your personal or company pensions and add up the total amount you have in them. You can find old pension pots that you’ve lost or forgotten about by applying for free to Gretel.co.uk. They’re great at finding all sorts of lost accounts and investments. Also find out here how to trace a lost pension.
Then take a look at any other investments you have such as ISAs, cash savings, property investments, stock market funds and so on, and add up the totals there.
Once you’ve added it all up you can work out roughly how much of an income you could get from this total each year by multiplying it by 3%. That is, conservatively, what you could get as an interest rate on your combined investments. So, if you have £200,000 in total in your savings, you could make upwards of £6,000 a year from it.
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Check your National Insurance contributions
In order to qualify for the full State Pension, you need to have at least 35 years-worth of National Insurance. If you took time off to look after children or a vulnerable adult, then you should have gained National Insurance credits. Check at Gov.uk to see if you are up to date with your payments.
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3. Check that your contact information is to up to date on your pension documents
Have you moved or changed your name recently? Speak to your personal or company pension provider to find out how they plan to communicate changes with you.
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4. Watch out for scammers
If you get a call out of the blue from someone offering to help you move your pension or put it into something that will get you a better return, slam the phone down. It’s illegal for companies to cold-call you about your pension savings.
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5. Get free help
PensionWise, a service from MoneyHelper, is a genuine government service that offers free and impartial information about the different ways that you can take money from your pension savings. If you’re over 50 and want to get some free advice go to PensionWise.
6. Make sure you can access your spouse’s pension
If your spouse has a company or personal pension, make sure you will be able to access it if they die early. Sometimes it’s just a question of making sure the right boxes have been ticked.
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7. See what level of State Pension you can get
The age at which you can start to draw your State Pension has just gone up to 66. It will go up again (incrementally) to 67 by 2028 and then will be 68 by 2046.
If you are unsure at what age you will qualify for the State Pension, check for it on the Government website.
Currently the maximum that you can get from the State Pension is £221.20 per week (2024/25). This is separate from any private pension that you save for either independently or through work of course.
If you are retiring soon it’s helpful to work out whether you’re entitled to a Basic State Pension or a New State Pension. You can find out on Gov.uk here.
It’s also important to know that you won’t start receiving your State Pension automatically. In fact, you need to apply for it when you come of age.
8.Think up a side-earner
When you have added everything up, you might find that you’re facing a shortfall in your retirement savings. Worry not. You can take on a fun side hustle that will help you add to your retirement savings and also, potentially, bring in extra income when you retire.
There are hundreds of different ways to make extra cash in your spare time, depending on your skills, geography and time constraints. It could be baking cakes to sell at car boot sales and markets, doing some dog walking in your area, tutoring local kids or those online, helping people with their computers and much more. Find out hundreds of fun ways to make money and have interesting experiences here.
9.Put off retirement
There’s no law that says you have to retire by 66. You could either retire later or stagger your retirement by going part-time for a while. Many studies have found that people who work in retirement are healthier and live longer than those who don’t, so it’s not such a bad thing to be forced to work in some cases.
Let’s hope interest rates don’t fall below 3% when they do start comming down for those with savings.
Agreed. Savers have had a tough time in the last decade and a half.