The five things you need to know to give you a better retirement | PLSA
The five things you need to know to give you a better retirement

The five things you need to know to give you a better retirement

23 June 2021

Pensions remain one of life's great mysteries explains Nigel Peaple, Director of Policy & Advocacy. Do I have enough saved? How do I use It when the time comes to retire?

1. Eligibility for pensions

Most working 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 £9,350 per year. This can be drawn at that level when a person is between 66 and 68 years of age depending on their date of birth.

2. Automatic enrolment in a workplace pension

The Government also helps people make extra pension savings by ensuring most workers are automatically enrolled into a workplace pension. The value of that pension depends on the level of contributions both you and your employer make. There is also some support from the Government through tax measures, in particular, when you draw your pension 25% of the sum is free of tax. If you are not automatically enrolled into a workplace pension, you can either ask to join it or save in some other way.

3. Tools to help plan for retirement

For many people, the best way to have an adequate income in retirement is to save gradually over the whole of their working life and save what they can afford. 

The PLSA has produced its Retirement Living Standards to help savers picture the future for what life in retirement looks like at three different levels of expenditure: Minimum, Moderate and Comfortable. These look at all aspects of day-to-day costs such as weekly food shopping, the cost of transport, going out and holidays.

Roughly speaking, a single person will need about £10k a year to achieve the minimum living standard, £20k a year for moderate, and £30k a year for comfortable.

4. Choices about drawing your pension

When savers get to retirement, they can choose how they draw their workplace pension savings. For example, you can select a product that pays a fixed amount every month (an annuity), take a more flexible option where you can vary what you draw but the amount is not guaranteed (drawdown) or take cash as a lump sum. Savers can also choose a mixture of these approaches.

5. Information and advice is available

Free guidance and information is available from the government-backed MoneyHelper and Pensions Wise services or you can seek personalised advice from an independent financial adviser.

More information can be found at


This piece first appeared in The Guardian on Wednesday 23 June 2021 here.

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