You may be turning up to work each day, asking yourself the sixty-four-thousand-dollar-question, “When can I afford to retire?” 

The answer will be different for everyone, and will depend on your current income, and whether you are saving enough to reach your long-term retirement goals. 

We explore some of the financial issues you need to consider, as part of your retirement planning. 


When can you retire? 

You can stop working whenever you want, but you need to be confident that you can support yourself financially, without a regular income, until you can access your pension, or your other retirement savings. 

Use this tool to check the earliest age you can start receiving the State Pension. Remember, there is no longer any default retirement age at sixty-five. The State Pension age is due to increase to sixty-eight between 2044 and 2046, and this may be brought forward to between 2037 and 2039. 


Where will your funds come from? 

The amount that you receive for your State Pension, will depend on how many years of National Insurance contributions you have paid. To get the full amount, you must have paid thirty-five years so check your record for any missing years. 

As well as the State Pension, you may have been saving into a Lifetime ISA, or have a private or workplace pension. You can start to withdraw money from a Lifetime ISA for retirement purposes at age sixty. 

Regarding a private pension or workplace pension, you can access your benefits from age fifty-five. Bear in mind, however, that the Government is planning to increase the minimum age at which you can access your private pension to fifty-seven in 2028. 


How much do you need to save? 

Many people just put some money away each month without any real sense as to whether that will be enough to live the kind of retirement they want. 

A pension calculator such as this one from the Money Advice Service, is a good starting point, although the exact amount will depend on your particular circumstances. The general rule is that you will need between a half and two-thirds of your income at retirement, per year. The Office of National Statistics (ONS) stated that in 2019, the average annual spend in retirement was £23,330. 

The following figures compiled by Royal London, give some guide as to what you might need to save each month. The monthly cost depends on when you start saving, what age you want to retire at, and the type of retirement you want to lead. 

A minimum income would cover all your needs, with a little left over for leisure activities; a moderate one, would offer more financial security and flexibility; and a comfortable income, even more financial freedom with some luxuries. 

These calculations, were based on the assumption that pension contributions would be fixed every month, that investments would grow at five per cent a year, that inflation was only two per cent, and that annual management charges would be 0.5 per cent. The figures, taken from calculations by the Pensions and Lifetime Savings Association, are for a single person and assume a full state pension of £9,339 a year. 

Pension Intended retirement age and monthly cost
55  60 65  70
Start at 22  Minimum: 

£10,900 a year

£90  £65 £50  £35

£20,900 a year

£640  £480 £355  £260

£30,600 a year

£1,360  £1,020 £745  £555
Start at 40  Minimum: 

£10,900 a year

£215  £140 £95  £65

£20,900 a year 

£1,570  £1,030 £690  £480 

£30,600 a year

£3,330  £2,180 £1,465  £1,020

Remember, the earlier you start saving, the longer you will have to benefit from the compounding effect of interest. 

It is crucial to review your pension savings regularly, to ensure you are in control of when you retire and your lifestyle in later life. If you would like to set up a review with one of our advisers, do get in touch.