How does Rest Less make money
We make money through advertising and commission from affiliate links, which enable us to offer Rest Less as a free service to our users. The content on this page may use affiliate links, which track traffic from our website to a third party provider and enable us to receive a commission or payment from any traffic we refer.
* Affiliate links on this page have an * next to them. We place enormous importance on our editorial independence and the integrity of our content which means that we will never change how we write about something as a result of an affiliate link.
Retirement is one of the biggest financial transitions most of us will ever make, yet many people reach their 50s or 60s without knowing how much income they’ll need or when they’ll be able to stop working.
Although none of us can predict exactly what the future holds, taking some time to plan ahead can make a real difference. Having a clearer picture of your finances, housing plans, and retirement goals can help you feel more confident about the years ahead and give you more freedom to focus on the things that matter most to you.
Here, we outline some of the key questions that you might want to consider as you start planning for life after work.
How much will you get from the State Pension and when can you claim it?
The new full State Pension is £241.30 a week in the 2026/27 tax year, although the amount you’ll personally receive will be based on your National Insurance Contribution record.
The full basic State Pension, paid to those who retired prior to April 6, 2016, stands at £184.90 a week in the 2026/27 tax year. To receive the full new State Pension once you reach retirement age, you’ll typically need to have paid 35 years’ of qualifying National Insurance contributions (NICs). If you have fewer than 10 years of contributions, you won’t receive any State Pension at all. Learn more in our article Will I qualify for the full State Pension?
You can check how much State Pension you’re likely to receive by requesting a State Pension forecast. This provides an estimate based on your National Insurance (NI) record to date, as well as the amount you could receive if you continue making contributions until you reach State Pension age. Find out more in our guide How can I get a State Pension forecast?
If your forecast is lower than you expected, it’s worth checking your National Insurance record. This will show whether you have any gaps in your contributions since 2006. In some cases, you may be able to boost your State Pension entitlement by making voluntary National Insurance contributions to fill these gaps. You can view your NI record on the government’s website here.
You can usually start claiming your State Pension once you reach State Pension age, which depends on your date of birth.
It’s important to remember that the State Pension age is subject to regular review and is gradually increasing in response to rising life expectancy. It is currently scheduled to rise to 67 by 2029 and then to 68 between 2044 and 2046. Find out more in our article How the State Pension works.
How much income will you need in retirement?
One of the reasons so many of us put off thinking about retirement is that we simply don’t know how much we’re going to need, and the figures that often appear in the press seem completely unattainable.
It’s important to remember that these target retirement numbers are just intended to be a rough guide, and everyone will need a different-sized pension pot depending on the sort of lifestyle they want to lead in retirement, and when they plan to stop working.
When thinking about what sort of income you might need, a good starting point is to sit down with your bank statement and look at all how much your essential outgoings add up to each month. These will include your gas and energy bills, any mortgage or rental payments, council tax and food.
You’ll also then need to consider how much you’re likely to want to allocate each month to non-essential costs such as travel, hobbies and leisure activities, eating out and so on. This should help you come up with a monthly target income to work towards.
According to the latest data from the Office for National Statistics, the average UK household spends around £2,700 a month, although spending varies considerably depending on age, household size and location. Many retirees find they spend more in the early years of retirement when they’re active and travelling, before expenditure gradually falls later in life.
For example, if your essential spending comes to £1,500 a month and you’d like an additional £800 a month for discretionary spending, you’d need an income of around £2,300 a month, or £27,600 a year. If you’re expecting to retire at State Pension age and are on track to receive the full new State Pension, currently worth just over £12,547.60 a year, your private pensions and savings would need to provide the remaining £15,000 or so.
Learn more in our article How much do I need to retire at 55, 60, or 65?
What pension savings do you have?
If you want to work out when you’ll be able to retire and what sort of income your pension pot will provide you with, you’ll first need to locate all your retirement savings.
Many of us will have paid into several different workplace pensions over the years, especially if we’ve worked for a number of employers. If you’re trying to find an old workplace pension, start by contacting the pension provider if you know who it is. Most major providers have customer service teams that can help you track down your pension using details such as your name, date of birth and National Insurance number.
If you can’t remember which provider your pension is with, get in touch with your former employer. They should be able to tell you which pension scheme you belonged to and provide the provider’s contact details. Having the dates you worked there and when you joined the scheme may help. Bear in mind that if you left the scheme within two years of joining, you may have received a refund of your contributions instead of building up pension benefits.
You may also want to check whether you ever contracted out of the State Earnings-Related Pension Scheme (SERPS), as this could mean you have pension benefits held in a former workplace scheme. If all else fails, the government’s Pension Tracing Service can help you find contact details for lost workplace and personal pensions, although it can’t tell you whether you have a pension or how much it’s worth. You can contact the Pension Tracing Service by phone on 0800 731 0193 or at GOV.UK.
Find out more in our article Tracing lost pensions – How to find my old pensions.
When do you want to retire?
Having a target retirement age in mind can make retirement planning much easier, as it allows you to estimate how many years you have left to save and how long your pension might need to support you.
Even if your plans change later, setting a provisional retirement date can provide a useful framework for working out whether you’re on track to achieve the type of retirement lifestyle you want.
For example, someone retiring at 60 may need their pension to last for 30 years or more, whereas someone who works until they are 67 might have to fund around 20 years of retirement. If you’re worried your pension savings won’t be enough to fund a long retirement, you might want to weigh up whether retiring later is an option. This will give you longer to build up your pension savings and means you’ll potentially spend fewer years drawing an income from them.
Remember that most people won’t be able to access the State Pension immediately when they stop work. The State Pension age is currently 66 for both men and women and is due to rise to 67 between 2026 and 2028. This means that if you retire before reaching State Pension age, you’ll need enough savings, investments or private pension income to bridge the gap. Find out more in our article Can you afford to retire?
Where will you live?
One of the biggest decisions you’ll need to make when planning for retirement is where you want to live. For some people, the answer is simple. If you love your home, have friends and family nearby, and can comfortably afford to stay there, you may have no desire to move once you stop working.
However, our home is often one of our most valuable assets, so it’s worth thinking carefully about whether your current property will continue to meet your needs in later life. For example, if you’re living in a large property that no longer suits your lifestyle, downsizing could reduce your household bills, maintenance costs and council tax, while also releasing capital that could help fund your retirement.
Some people choose to move to a less expensive part of the country where property prices are lower and day-to-day living costs may be more manageable. Others relocate to be closer to children and grandchildren, or to access better transport links, healthcare facilities or leisure opportunities. If you’re considering moving, it’s important to think beyond property prices and factor in costs such as stamp duty, legal fees, removal expenses and any changes to your overall cost of living. Find out more in our articles 8 ways to unlock more freedom through downsizing and Is it time to downsize your home? 5 questions to help you decide.
If you’d prefer to stay in your current home but need to supplement your retirement income, you may want to explore equity release. This allows homeowners aged 55 and over to unlock some of the value tied up in their property without having to move. The money released can be taken as a lump sum, in smaller amounts over time, or a combination of both.
However, equity release is a major financial decision and won’t be suitable for everyone. Interest can build up quickly if it isn’t repaid, reducing the value of your estate and the inheritance you leave behind. It may also affect your eligibility for means-tested benefits. Before proceeding, it’s essential to seek independent financial advice and carefully weigh up the advantages and disadvantages alongside other options that may be available to you.
Learn more in our article Is equity release right for me?
Turning your retirement plans into reality
Retirement looks different for everyone. Some people have a clear idea of how they want to spend their time, while others prefer to keep their options open. Whatever your plans, taking the time to think about the practicalities now can help you feel more prepared for the future and more confident about the choices available to you.
You don’t need to have all the answers straight away, but having a few plans in mind should make it easier to enjoy whatever comes next.
Rest Less Money is on Instagram. Check out our account and give us a follow @rest_less_uk_money for all the latest Money News, updated daily.
Join the discussion
Read our full commenting terms and guidelines