What does retirement look like for you?
You might want to work part-time, travel more, take up new hobbies, or simply enjoy a slower pace of life. Whatever your vision, it helps to think about how your lifestyle – and spending – might change over time.
As you age, there will be things you’re not able to do as much, so the latter years of retirement could end up being very different compared to the initial ones. For example, you might need to factor in the possibility of mobility issues, which could hinder you from doing certain things. The main thing to remember is you’re going to have to be flexible – life happens and things change.
How to access your pension
How much money do I need to retire?
This might feel like asking ‘how long’s a piece of string?’, but once you’ve considered the type of lifestyle you’d like, this can give an idea.
| Categories | Single person | Couple |
|---|---|---|
| Minimum | £13,400 | £21,600 |
| Moderate | £31,700 | £43,900 |
| Comfortable | £43,900 | £60,600 |
Things to think about when you’re planning ahead
- When can you afford to retire?
- Feel like you’re not on track?
Once you know your desired lifestyle and estimated costs, the next question is when can I afford to retire?
Begin by taking stock of what sources of income you can draw upon, and how much they’ll provide you with. This might be:
- Workplace or personal pensions
- Savings and investments (like ISAs)
- Property income
- State benefits
- The State Pension
Be sure to check your State Pension forecast on the government website as not everyone qualifies, or is entitled to the same amount. This is because it’s based on National Insurance contributions and your personal circumstances. For 2026/27, the full State Pension is £241.30 a week.
Deciding how to access your pension
How you decide to access your pension will have an impact too. There are various ways to do this, with different implications for the type of income you receive.
If you have more than one source of income, consider the order of how you utilise them. Maybe you’d like to use up an ISA first before accessing your pension, or vice-versa. This can be complicated, but expert financial advice can help.
Feel like your pension’s not on track?
Don’t fret. There’s actions you can take to potentially boost things – it’s never too late to take action.
Delaying retirement
You might even decide that delaying retirement for a number of years is the best thing to do. It’s also worth visiting the government’s free pension tracing service – doing so could help you track down old pensions you may have forgotten about.
Other things to consider
Deciding what to do with your pension pot is a big decision. Here are some important points to consider:
If you have several pensions, combining them could make retirement planning a lot more straightforward and easier to manage. It’ll also save you considerable admin.
This won’t be right for everyone though, as you could be giving up valuable benefits and guarantees by doing so.
Just like the income you earn from employment, you receive a personal allowance on retirement income which isn’t taxed.
This is currently £12,570 for 2026/27, although may be higher or lower depending on your personal circumstances. Anything you receive over this amount will be subject to tax, this includes income lumped together from the likes of:
- the State Pension
- a workplace or personal pension
- employment
- any taxable state benefits
- property
You won’t pay any tax on income from tax-free savings accounts like ISAs, and some state benefits are also tax free. The amount you’re taxed depends on how much you receive over the £12,570 limit.
For England, Wales, and Northern Ireland:
| Tax band | Income range | Tax rate |
|---|---|---|
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| £50,271 – £125,140 | Over £125,140 | 45% |
For Scotland:
| Band | Income range | Tax rate |
|---|---|---|
| Starter rate | £12,571 – £16,537 | 19% |
| Basic rate | £16,538 – £29,526 | 20% |
| Intermediate rate | £29,527 – £43,662 | 21% |
| Higher rate | £43,663 – £75,000 | 42% |
| Advanced rate | £75,001 – £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
For a more detailed breakdown of taxes that impact savings, investments and pensions please visit our tax hub.
Tax treatment depends on your individual circumstances including where you live in the UK. Tax rules may change in the future.
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