Sign up for news alerts.

We update our financial wellbeing resources regularly to help people build their financial literacy. If you would like to be notified of these updates please submit your email address below, you can opt out whenever it suits you.

Square icon-style image overlaid on the hero banner

Retirement Planning Guide

Welcome to Unividual's comprehensive guide to retirement planning. Whether retirement seems like a distant dream or a looming reality, taking proactive steps today can pave the way for a future of financial security and peace of mind.

Plan your retirement: Navigating Your Financial Future

Imagine a retirement where you’re free to pursue your passions, travel the world, or simply enjoy the simple pleasures of life without worrying about financial constraints. It’s not just a fantasy; it’s within your reach with the right planning.

Making sure your retirement is taken care of long before you actually retire is one of the most important gifts you can give your future self. By crafting a solid retirement plan tailored to your unique goals and circumstances, you’re not just securing your financial future, you’re also investing in your overall well-being. Studies consistently show that individuals with a clear retirement plan experience lower levels of stress and worry about their future. They can approach their golden years with confidence, knowing they’ve laid a sturdy foundation for a fulfilling retirement lifestyle.

In this guide, we’ll explore the key components of retirement planning, from setting realistic goals and understanding your pension options to maximising your savings and navigating potential obstacles along the way. Whether you’re just starting your career, in the midst of your working years, or nearing retirement age, there’s valuable information and actionable advice here to help you make the most of your retirement journey. So, let’s embark on this journey together and empower you to build the retirement of your dreams, one smart decision at a time.

It is never too late to plan for retirement

You may have an idea of what your retirement might look like: where you’ll live, your lifestyle, the places you’ll visit, the time you will spend with loved ones and on your hobbies.  These dreams seem very hazy when you’re young but come into sharp focus as you get older and the right retirement plan will allow these goals to become a reality. Like most investments, the concept of planning your finances for retirement is pretty straightforward:

By putting a little bit away each month, you can build up a ‘pot’ that will keep you comfortable after you finish working

The complexity comes when you consider how many ways there are to achieve this, and the age at which you start. This ultimate guide to retirement planning will:

1. Help you understand all the factors in play

2. Give you basic evaluation of your current financial position

3. Give people in different age brackets ideas on how you can prepare for your own retirement

4. How to be tax efficient while saving for retirement


How your life stage relates to retirement: In your 50s or 60s

By now, retirement will be in your sights. You may have a firmer idea of how things might pan out. You might now be in a position where you can tweak things in your pension and investment planning to make sure you are in a position where you have options.  It’s never too late to start planning, after all there is a £1,073,000 lifetime limit on pensions. If you haven’t yet received financial advice then talking to a pension specialist will help to identify what assets you have and how they can be leveraged in your retirement planning. You will also need to find a way to ensure you are tax efficient with your hard-earned money. This becomes complicated and seeking financial advice will put you in a better position than if you got no help at all.

Pensions are where most people start off when thinking about retirement. In fact, your assets, pensions, savings and investments will all play a role in your retirement planning. When it comes to pensions these complex products are designed to allow regular contributions to mount up over time to a final retirement fund. They then pay out (or this same pot can be used in other ways) over the course of your retirement. There are many types of pension, but some of the most common are:

Defined contribution (DC) pension schemes 

You, and potentially your employer, pay a defined amount of money into a pension pot. The amount the pension will provide in your retirement is changeable and will depend on factors such as the amount you pay in, the investment performance, and how you choose to use the pot after the age of 55.

Defined benefit (DB) pension

This pension contribution changes based on: your age, how long you’ve worked and the salary you’ve earned. Your employer will pay into this pension, and you can make additional contributions to the scheme as well. This will then pay out a defined amount when you retire. After you die, the pension may continue to pay out to a spouse, civil partner or dependent.

Personal Pension

A type of defined contribution pension scheme. You’ll need to choose a pension provider and arrange the contributions yourself. This offers you ultimate responsibility, but it’s a wise idea to be in the know about the ins and outs of pensions and how they can affect your retirement plans. Often people have workplace pensions and their own personal pension.

Stakeholder pension

Another type of defined contribution pension. They are designed for low minimum contributions and flexibility across their payment lifetime. The charges will typically remain low and there will be a default investment strategy. There might not be that much choice with a stakeholder pension, but they are often simpler to understand.

Self-invested personal pensions (SIPPs)

A SIPP allows you to ‘wrap together’ a whole range of investments. It’s similar to a personal pension, but with more flexibility in the type of investments you can hold. There is a set number of investment types that can be included, such as trusts, securities, deposit accounts, commercial property, and stocks and shares. By including investments in a SIPP you gain growth that is free from Income Tax and Capital Gains Tax, plus additional tax breaks. They can be a good top-up option for your retirement plan.

Transforming retirement dreams into reality, a Client's journey to financial freedom

In a recent heartfelt encounter, Simon Jones, a dedicated financial adviser and a fellow of the Personal Finance Society, shares an inspiring story of hope and achievement. Imagine being told you could retire in just seven years, a prospect you never thought possible. This is precisely the revelation Simon delivered to a client, sparking an emotional response that underscores the profound impact of financial planning.

“This week I had a really great meeting with a client. I demonstrated how she could retire in 7 years, something she didn’t think was realistic. She was over the moon, so much so, she welled up. Helping people is the most rewarding part of being a financial adviser, I was so pleased my hard work genuinely had a big impact on the lives of my client and her husband.

“It’s not uncommon that people are fearful of the future, especially when it comes to retirement. Time and again I see that once I help clients push through the pain barriers, the reality of their retirement isn’t as scary as they thought. Part of the training we get from Unividual is how to coach and support clients as well as advise them on their finances. Even if you are short of your retirement target at least you know the facts. One way or another we can lay foundations for what should be one of the most enjoyable periods of time in your life”

As a Chartered Financial Planner and holder of the Pension Transfer Gold Standard, Simon’s expertise and compassionate approach demystifies the fears that often cloud retirement. Whilst we get a lot of motivation and satisfaction out of helping clients achieve their dreams this reflects our commitment to coaching, supporting, and advising clients on the journey towards what should be one of life’s most fulfilling chapters.

If Simon’s approach resonates with you, we invite you to discover more about how he can help transform your retirement aspirations into a tangible plan, starting with a free, no-obligation meeting.

Simon Jones is a fellow of the Personal Finance Society, a Chartered Financial Planner and holder of the Pension Transfer Gold Standard. If you would like to find out more about what Simon does, get in touch for a free, no obligation, first meeting.

How your life stage relates to retirement: In your 30s & 40s

This is the age that most people start planning for a pension. Many people get near to their 40s and think “I have left it to the last minute”. It is never too late to start planning. You will always be better off the sooner you start planning but you will have built up some savings and assets so far that you can start to formulate in to a plan. It is also the age bracket where you might have the most change: partnership, children, home buying, inheritance and a potentially demanding career. This means there is both the opportunity to make more money but conversely your expenses may go up.

It is never more crucial that you start to really build up your retirement funds. If you haven’t yet started saving for retirement you will have to find unique ways to increase your savings in line with the amount of money you will need to retire on.  A mixture of exciting long-term planning can also be combined with a portfolio of less volatile investments alongside your pension, such as bonds or fixed annuities.

Overcome retirement anxiety

Worrying about your retirement and doing NOTHING is the biggest mistake you could make in your life. Yet you aren’t alone, it is the most common thing people do as they start to get older. If you’ve come this far without seeking the professional help of a financial adviser you might be feeling confused about how pensions work and worried about retirement. Many people feel like this because they lack facts. The unknown makes us nervous and you might feel unsure how much money you have and whether it will be enough. It is essential you don’t “bury your head in the sand” and put off speaking to someone because of that confusion. Our financial advisers see this day in and day out and they understand where you are coming from and what you feel. Part of Unividual’s recruitment strategy and training is to ensure our financial advisers have the emotional intelligence and empathy to coach and guide people, whilst also advising them on their finances. So, as you approach your 40s, if you’re thinking “I’ve got nothing in place for my retirement”, don’t just hope for something to fall into place as if by magic. Now is the time to pick up the phone and talk to a professional investment and pension planner. You may have options that you’ve not yet considered that will let you relax a little about your retirement.

Business owner retirement

Perhaps you own a business? A note of caution on treating a property or business as part of your retirement plan. If you see yourself selling a business and using those funds to retire, then exit planning is the order of the day. Start to prepare the business for sale and get an idea of how to make it as attractive as possible to potential buyers. Don’t make the same mistake as others, by using the sale of a property or business as the only “Plan A” of your retirement.

Don’t just rely on work-place pensions

It’s important not to look at the workplace pension you’ve had for the last few years and simply consider that the end of the matter. You need to look at the final pension amount to see if it’s going to be sufficient to support your aims in retirement. If you’ve moved around a little and had a few jobs, you might have multiple workplace pensions. We help clients amalgamate their separate pensions in cases like this, and the outcomes can be very effective in getting your retirement planning on track.

Case Study: Worrying about how much you have for retirement

“We can not recommend Simon Jones and Unividual highly enough. I’m afraid he had an uphill start as we had bad experiences of ‘old-school’ advisers. He took pains to allay all our fears. We were fast approaching retirement with little understanding of the benefits and pitfalls of the pensions and products we had in place. After several meetings, Simon had a full understanding of our hopes and the products we had. He was able to recommend alternatives that better fulfilled our requirements and overall left us feeling confident about our future which we hadn’t previously. He has also arranged for our wills to be written which we hadn’t got round to doing for a very long time. We are in a much better position all round.”

– Claire, Bristol

Find out more about Simon

How your life stage relates to retirement: In your 20s

If you’ve just started employment it may seem counterintuitive to be thinking about retirement. We understand how you feel, after all, many of us at Unividual are in our 20s too. When you think about anything to do with managing your money in your 20s it sometimes can feel daunting and too adult like, something we can feel like we want to rebel from. After all, we have spent most of our lives in education and we want to get out and explore the world and not get serious. Plus we all have student loans to pay back, rent to pay, some want to save for a house and of course, we all want to enjoy our social lives too.

A word from Cherie-Anne, Unividual’s Marketing Director

“The last thing I thought about doing when getting my first job in recruitment was saving for retirement. I was earning £18,000 at the time and wanted a new car and to also save for a house. There is an old wives tale that if you take your age and half it, that is roughly how much you should put into your pension. My Dad, as a financial adviser, went through the reasons why and how saving early would benefit me. At the time all I could focus on was how that money could be spent on other things but I rolled with it and started saving 10% of my earnings. I quickly realised after the first few months that actually you could do both: save for retirement AND still have a social life. I am now in my 30s and have over £50,000 in my pension. My brother Lewis Baxter now advises me, we recently moved my pension and it has had really good growth even during Coronavirus.”

“If I hadn’t made those contributions for the last 10 years I wouldn’t have had any more or less fun, or more memories from my 20s. I lived just like my friends did. What it did do, on top of creating a pot of earnings, is give me flexibility. Due to my head start I was able to put a small pause on contributions whilst my partner and I saved to move house. This won’t be for long and I will be making up for this lost time over the coming months. Everyone looks back and thinks ‘I wish I saved earlier’….not me!  I am so glad my Dad encouraged me to start early because I have managed to slowly build a sizable pot.”

– Cherie-Anne Baxter, Chartered Marketing Director

A note from retirement planning expert, Simon Jones

“At the time Cherie-Anne was a 20 year old looking to make a total pension contribution of 10% of her earnings. Many people don’t realise that due to the benefit of tax relief from the government, if Cherie-Anne invested in a private pension, as a basic rate tax payer she would actually contribute 8% of her earnings to achieve a total contribution of 10%.  This would work through the pension provider who adds on the basic rate tax relief and then claim it back from HMRC. So, on 10% of a £18,000 salary, if Cherie-Anne contributes £120 per month (£1,440 per year or 8% of £18,000)  she will have £30 tax relief added at source. £150 per month is £1,800 a year and therefore 10% of a £18,000 salary.

Psychology behind retirement planning

Putting away money for the future, especially when you’re young, can be difficult. That’s thanks to an element of human psychology called ‘hyperbolic discounting’. This is where we are hard-wired to value £1 in our pocket today over £1 in a future situation. It is important to recognise how important it will be to have a stable income after you stop working. The state pension is no longer something that can be relied on to keep you in your old age, and the state retirement age will continue rising to 68 by the late 2040s. You need to take matters into your own hands. Thoughts of “I can’t find time” or “I’ll sort it out tomorrow” need to be banished in favour of “I’ll start my planning today”.

Get in touch about retirement advice


The magic of compound interest

People getting closer to their retirement will tell you how quickly the years go by. Saving becomes more difficult as you acquire other expenses and responsibilities. One of the reasons to start saving early is compound interest, which is actually quite exciting when you know the secret. We like to use the analogy of a snowball fight.

You are at the top of a mountain, you have just made a snowball. To start with it is quite small, the size of your hand. If you were to throw it towards someone it wouldn’t have a massive impact. So, instead you roll the snowball down the mountain and as it turns it picks up more snow. The bigger the snowball gets, the more snow it can pick up and the faster it grows in size. You keep rolling until you get the size of snowball you need to win your snowball fight!

This is how compound interest works. You start off with a small investment that earns interest, then the investment and the interest earnt, earns more interest. The younger you start saving, the longer your money has to grow. The interest on interest (AKA compound interest) can cause wealth to snowball in growth. When you near retirement your small savings pot, which didn’t feel much at the time, will have grown significantly.

Let’s look at a practical example. From the age of 20 to 30, someone saves £100 a month, £1,200 a year. This total amount of £12,000, with a standard annual growth of 5%, will amount to £80,811 by year 29. This nest egg alone would be worth £117,149 by the time that person reached 70. In comparison, someone starting to save from the age of 40 would have to contribute £200 a month, £2,400 a year, for 15 years, until the age of 55 to get a similar value of £118,700. Take a look at our compound interest calculator to plot a few figures of your own.

Naturally other factors affect the end value of any pension plan, but the above serves as an example. A lot of younger people think they aren’t rich enough to need financial advice but receiving professional financial advice early on also means you’ll be able to avoid losing valuable allowances and take advantage of tax breaks. Actually financial advice is not as expensive as what people think so getting into good money habits now can bring huge benefits throughout your life.

How to plan for retirement

Planning for retirement involves careful consideration of your current financial situation, future goals, and expected expenses. So how do you get started?

Where are you now: Start by assessing your current income, savings, investments, and any retirement accounts you may have.

Where do you want to be: Next, envision your ideal retirement lifestyle. Will you travel frequently, pursue hobbies, or downsize to a quieter existence?

Estimate your future expenses: Once you have a clear picture of your retirement goals, you can estimate your future expenses, including housing, healthcare, leisure activities, and any additional needs.

One popular method for DIY investors, for determining how much you’ll need in retirement, is the “80% rule,” which suggests aiming to replace around 80% of your pre-retirement income to maintain your standard of living. However, everyone’s circumstances are unique, so it’s essential to personalise your calculations based on your individual needs and aspirations. This is why it is important to consider consulting with a financial advisor who can help you create a customised retirement plan tailored to your specific situation. Not doing this could put everything you have worked for at risk.

How do I calculate what I need for retirement?

The final thing we all need and want to understand most is how much we need saved to retire. The amount someone needs saved for retirement varies greatly depending on several factors, including their desired retirement lifestyle, anticipated expenses, life expectancy, and any additional sources of income, such as pensions, rent or investments. While there’s no one-size-fits-all answer, financial advisers often recommend aiming to replace around 70-80% of your pre-retirement income to maintain your standard of living during retirement.

To calculate how much you personally need saved, you can use the following steps:

  1. Estimate your annual expenses in retirement, including housing, healthcare, food, transportation, leisure activities, and any other essential costs.
  2. Subtract any expected sources of income during retirement, such as pensions, Social Security, rental income, or part-time work.
  3. Multiply your estimated annual expenses by the number of years you expect to spend in retirement. Consider your life expectancy and any potential healthcare costs or long-term care needs.
  4. Adjust your calculations for inflation to ensure your savings will retain its purchasing power over time.
  5. Use a retirement calculator or consult with a financial advisor to determine how much you need to save each month to reach your retirement goals, taking into account your current savings, investment returns, and time horizon.

Ultimately, the amount you need saved for retirement is highly personal and requires careful consideration of your individual circumstances and goals. Working with a financial professional can provide personalized guidance and help you create a retirement plan tailored to your needs.

Do I need a financial adviser to plan for retirement?

If you are keen to outsource your retirement planning, because let’s face it most of us don’t have the knowledge, tools or time to do this type of thing justice, you need to find a qualified financial adviser and someone who you enjoy working with that will get you into good money habits.  As you get older you will also start to look at inheritance tax planning and multi-generational investment strategies. It’s all part of making retirement planning worry-free and enjoyable. Talking to a financial adviser you trust can help clarify where you stand, and you’ll feel calmer as a result. You can start off by making sure the financial adviser you want to work with is registered with the Financial Conduct Authority. We can hold your hand through the whole process and make sure you know what to expect at every step of the way. Many people don’t know that you’ll legally need to approach a registered financial planner before you can cash in your pension. So, it’s a good idea to have a relationship with one you trust before you legally need one. Not many realise this and we work with a lot of people who are just a few months away from retirement.


Talk to us about your retirement plan and the options available to you

    Author: Cherie-Anne Baxter-Blyth

    Date: 30th April 2024

    Updated: 30th April 2024

    Tax treatment varies according to individual circumstances and is subject to change.

    The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.

    Business Exit Planning is not regulated by the Financial Conduct Authority.


    Get in touch

    The information collected will be used solely for the purposes of providing background information when contacting you to arrange an appointment.