What to do in your 20s and 30s
- Join your workplace pension. Contribute at least enough to capture full employer match.
- Use salary sacrifice if available.
- Open a Stocks & Shares ISA. Contribute what you can afford after employer match capture.
- If under 40, consider Lifetime ISA — 25% government bonus on £4,000/year.
- Invest in broad-market funds/ETFs. Don't stock-pick.
- Automate contributions with monthly standing orders.
- Ignore your account balance. Check quarterly, not daily.
What to do in your 40s
- Confirm your workplace pension is capturing full employer match.
- If higher-rate taxpayer, boost SIPP contributions. Claim higher-rate relief via Self Assessment.
- Consolidate old workplace pensions where sensible. See Pension transfer guide.
- Check State Pension forecast at gov.uk. Fill any gaps in NI record.
- Increase savings rate as income rises — target 15-20% of gross income to pension + ISA.
- Continue investing in broad-market trackers. Don't drift into stock-picking.
What to do in your 50s
- Refresh State Pension forecast. Make voluntary NI contributions if gaps.
- Consider shifting some equity to bonds as retirement approaches (glide path).
- Model retirement scenarios — how much do you need each year?
- Check pension allowances haven't been breached. Use carry-forward if under-used.
- Review beneficiary nominations on all pensions.
- Consider hybrid drawdown/annuity strategy.
- Explore Salary Sacrifice for maximum tax efficiency in final earning years.
Five years from retirement
- Fine-tune asset allocation. Some retirees hold 1-3 years of essential expenses in cash and bonds.
- Confirm exact retirement date and required income level.
- Understand your drawdown provider. See Best SIPP UK for drawdown-friendly options.
- Check MPAA implications if planning to keep working after starting drawdown. See Pension allowances guide.
- Model retirement tax scenarios — combining SIPP, ISA, State Pension, other income.
- Update Will and Power of Attorney.
The year before retirement
- Finalise your income plan — target withdrawal rate, tax-free lump sum use.
- Review investment risk allocation.
- Understand your provider's drawdown mechanics.
- Set up necessary bank accounts for income delivery.
- Talk to your employer about retirement date and any pension actions required.
Sustainable retirement income planning
- Start with the 4% rule as an initial target withdrawal rate.
- Combine State Pension + SIPP drawdown + ISA drawdown for maximum tax efficiency.
- Consider annuitising a portion for guaranteed baseline income.
- Hold 1-3 years of expenses in cash to buffer against sequence-of-returns risk.
- See our Drawdown explained.
Tax planning in retirement
- Use ISA withdrawals for tax-free income when possible.
- Fill Personal Allowance with SIPP drawdown before dipping into higher tax bands.
- Take 25% tax-free lump sum strategically — some retirees phase it over several years.
- Combine spouse allowances where possible.
- Track Marriage Allowance if one spouse doesn't use full Personal Allowance.
Estate planning
- Update pension beneficiary nominations at every provider.
- Update Will to reflect current wishes.
- Consider Lasting Power of Attorney for finance and health.
- Understand IHT rules on pension and ISA balances (currently different treatment; rules under review).
- Talk to family about your plans.
Common mistakes
- Waiting too long to consolidate pensions.
- Not checking State Pension forecast.
- Ignoring higher-rate tax relief.
- Missing beneficiary nominations.
- Concentrating too heavily in employer stock through workplace schemes.
- No cash buffer at retirement — forced selling during a market fall.
- Not updating Will or LPA.
Frequently asked questions
When should I start retirement planning?
As early as possible. £100/month invested from age 25 typically results in £150,000-£200,000 by 65. £100/month from age 45 typically results in £30,000-£40,000.
How much should I save for retirement?
A common UK guideline is 15-20% of gross income including employer contributions. If starting late, higher.
Should I use an adviser?
Depends on complexity. For straightforward DC + ISA + SIPP, self-directed works. For DB transfers, business exits, complex tax situations, an FCA-authorised adviser is valuable.
What's the ideal retirement income?
Traditionally 60-70% of pre-retirement income. Depends on housing costs (mortgage-free?), health, and lifestyle choices.
Can I retire at 55?
Yes if you can access pension money at 55 (57 from 2028) and have sufficient savings. But retiring at 55 with 35+ year expected lifespan requires substantial pot — often £1M+ for comfortable income.