Nigel Peaple
Director Policy & Advocacy, PLSA
Planning for retirement can be daunting. How do you know if you have enough money saved up?
A full state pension is worth £9,339
The State Pension is a regular payment from the Government most people can claim when they reach State Pension age.
Most people in the UK who work, or undertake caring responsibilities, will be eligible for a State Pension if they have worked and paid National Insurance contributions or been a carer for at least 10 years.
If they have done so for 35 years, they will receive a full state pension, currently worth around £9,339 per year. This can be drawn at that level from when a person is between 66 and 68 years of age, depending on their date of birth.
Under the Pensions Act 2008, every employer in the UK must put qualifying staff into a workplace pension scheme and contribute towards it.
Most people are automatically enrolled in a workplace pension
The Government also helps people make extra pension savings on top of their state pension by ensuring most workers are automatically enrolled into a workplace pension.
Under the Pensions Act 2008, every employer in the UK must put qualifying staff into a workplace pension scheme and contribute towards it.
There are tools to help you assess what you will need in retirement
The PLSA has produced Retirement Living Standards that describe three different levels of expenditure in retirement. For single people it is Minimum (£11k), Moderate (£21k), and Comfortable (£34k) and for couples it is Minimum (£17k), Moderate (£31k), and Comfortable (£50k).
More information can be found at www.retirementlivingstandards.org.uk.
You have choices to make about drawing your pension
When savers get to retirement, they can choose how they draw their workplace pension savings. For example, a fixed amount every month (an annuity), a variable amount which is not guaranteed (drawdown) or take cash as a lump sum.
Finding more information
To help navigate the numerous options there is free guidance and information available from the government-backed MoneyHelper and Pensions Wise services.