7 things to consider before you retire

Retirement may still feel some way off, but the decisions you make in the years leading up to it can have a significant impact on the lifestyle you are able to enjoy later on.

In practice, many of the most important retirement decisions are made several years before you actually stop working, which is why reviewing your plans early can make a real difference.

Here are seven areas worth considering as you approach retirement.

1. Check your State Pension entitlement

The State Pension forms an important foundation of retirement income for many people.

You can obtain a State Pension forecast online to check whether you are on track to receive the full amount. The full new State Pension is currently around £241.30 per week (around £12,547 per year) from April, but you normally need 35 qualifying years of National Insurance contributions to receive the full rate.

If your record shows gaps, it may be possible to make voluntary National Insurance contributions to increase your entitlement.

Some people also consider deferring their State Pension, which can increase the amount you receive later.

2. Track down any lost pensions

Over the course of a career, it is easy to lose track of older pension pots.

The Pensions Policy Institute estimates there are millions of lost pensions worth billions of pounds sitting unclaimed in the UK.

If you’ve worked for several employers, it can be worth reviewing your paperwork or contacting previous schemes to ensure you have accounted for all your retirement savings. The Government’s Pension Tracing Service can also help locate older pensions if you no longer have the details.

3. Consider whether consolidation makes sense

If you hold several pension pots, consolidating them into one arrangement can sometimes make them easier to manage.

This may also reduce administration and allow your investments to be reviewed in one place. However, it’s important to check whether any plans include valuable guarantees or exit charges before making changes.

4. Understand what income your pensions could provide

One of the most important steps before retirement is understanding how your pension savings could translate into future income.

A retirement forecast could help to show how your pensions might grow and what level of income they may provide, based on different retirement ages and investment assumptions.

If you would like help reviewing your pensions or understanding what your retirement income might look like, you could consider speaking with your adviser who can help bring all the pieces together.

5. Review your future spending

Retirement often brings changes to household spending.

Some costs may fall, such as commuting or work-related expenses, while others may rise as people spend more time on hobbies, travel or leisure.

Creating a simple retirement budget could help ensure you understand the income you may need to support your desired lifestyle.

It can also be sensible to consider longer-term costs, such as healthcare or potential care needs later in life.

6. Be aware of pension tax considerations

Pension rules offer significant tax advantages, but they can also include complexities.

For example, drawing income from certain pensions can trigger the Money Purchase Annual Allowance, which reduces the amount you can contribute to pensions with tax relief in the future.

There can also be tax implications when taking lump sums or drawing pension income, so planning withdrawals carefully y can could help to ensure your retirement savings more tax efficient.

7. Bring everything together in a retirement plan

With many people now spending 20–30 years in retirement, ensuring your savings last throughout later life is an important consideration.

A structured retirement plan could help bring together your pensions, savings, tax planning and expected spending to ensure everything is working towards the lifestyle you feel is suitable for you.

If you would like to review your retirement plans or check whether you are on track, speak to your Continuum adviser or contact our team. A retirement review can help ensure your pensions and investments are aligned with your long-term goals.

Briefing Note 138 – Lost Pensions 2024 | Pensions Policy Institute

State pension 2025/26: How much am I entitled to? – MSE

This article is intended for general guidance only and is based on the opinion of Continuum it does not constitute financial advice. Individual circumstances vary, and you should consider seeking advice from a regulated financial adviser before making any decisions about your Savings, Investments, or retirement planning

A pension is a long-term investment; the fund value can go down as well as up and this can impact the level of pension benefits available. Pension Income could also be affected by interest rates at the time benefits are taken. Pension savings are at risk of being eroded by inflation

The value of an investment can go down as well as up and you may get back less than you invested. When investing Capital is at risk

Levels and basis of reliefs from taxation are subject to change and their value depends upon your personal circumstances. We recommend seeking professional advice on personal taxation matters.

The Financial Conduct Authority does not regulate taxation advice.