Retirement – planning for your future

Many people view retirement as a time to make some lifestyle and financial changes. A new-found sense of freedom can inspire new hobbies, world travel or more time with family and friends, enjoying all the pleasures life can bring. To fund retirement, many choose to downsize a family home to access funds that are tied up in a property and move into a property that will reduce their mortgage payments and monthly outgoings, or to cater for healthcare needs. Planning for your retirement is key. It’s important to know what you can do and when. So if you are thinking about retiring, here are some key pointers to get your started as you embark on the next chapter in your life.

When can I retire?

In theory, whenever you want. There is no legal age for retirement but the government won’t pay a State Pension till you reach the age of 65. The State Pension age is currently under review and changes are being implemented depending on when you where born. A handy tool is available on the Government Website to find out your personal pensionable age. Choosing early retirement is an option should you have the financial means to do so or others choose to work well beyond the age of 65. Employers cannot force their employees to retire at a particular age, and it’s up to you when you decide to stop working.

How many people are of retirement age in the UK?

According to the Office of National Statistics (ONS), in 2019, there were 12 million people aged 65 and above in the UK; · 5.4 million are aged 75+, · 1.6 million are aged 85+, and over · 500,000 people are 90+ and over, · 14,000 are centenarians It is predicted that by the year 2030, 1 in 5 people in the UK will be aged 65 or over, so now more than ever it is important to plan and prepare for your retirement.

How do I fund my retirement?

The new State Pensions can be claimed by men and women if you are:

a) a man born on or after 6 April 1951

b) a woman born on or after 6 April 1953

If you reached the State Pensionable age before 6 April 2016, the old rules will apply.

You can also begin to access a workplace, private or stakeholder pension. Most personal pensions set an age at when you can start taking money from them, it is not normally before 55, contact your pension provider to find out more. If you have paid into a pension and can’t find any details or lost paperwork, visit the Government website and use their pension tracking tool. If you continue to work after the age of 65, you won’t have to pay National Insurance on your income. You may be entitled to other financial help, so it’s important to check your entitlements and plan ahead before you take the decision to retire.

Can I access a lump sum for my retirement?

  There are several ways to obtain a lump sum to help fund retirement. If you require access to some of the equity in your property you can sell your home, downsize and purchase a smaller / cheaper property. There are ways to release equity in the home, such as an equity release scheme or re-mortgaging.

If you have a personal pension, you may be able to take a lump sum for your ‘pension pot’. You can take up to 25% of the money built up in your pension as a tax-free lump sum. You’ll then have 6 months to start taking the remaining 75%, which you’ll usually pay tax on. The options you have for taking the rest of your ‘pension pot’ include:

• · taking all or some of it as cash
• · buying a product that gives give you a guaranteed income (sometimes known as an ‘annuity’) for life
• · investing it to get a regular, adjustable income (sometimes known as ‘flexi-access drawdown’)

It is best to contact your pension provider or talk to a financial advisor to find out what your options are.

Selling your property to access the equity.

Selling a property and downsizing to a smaller, cheaper property, is an option many embarking on retirement choose.

It provides the opportunity to clear any debts, such as outstanding mortgage or loans.

It is always advisable to seek advice from a professional to make sure your affairs are in order and you don’t have any nasty surprises later on.

Budget planning.

Once you know how much money you will have after you retire, it is sensible to create a budget for day-to-day living. Knowing your daily expenses will allow you to plan for your future.  

Be scam smart.

You have worked long and hard for your pension, so don’t make any rash decisions to try and bolster your pension pot with ‘get rich quick’ schemes.  

As a rule, if a proposal sounds too good to be true, it most probably is a scam. Avoid engaging in any conversation from companies that cold-call on the phone offering investment opportunities. Seek advice from friends and family if you unsure and always seek professional advice from a registered independent financial advisor.

 

How can Spring help?

Selling your home may be the first stage in funding your retirement. Your home may no longer be suitable for your personal circumstances, health or physical needs. You or your partner, may have mobility issues that may be restricting your ability to move around the home as you once did. Many retirees simply no longer want the upkeep or hassle a larger property can bring. Downsizing can allow you to live in a home that is smaller and cosier, that requires less cleaning, gardening and overall maintenance.

If you decide to downsize, Spring’s home buying service can help. Downsizing is one of the most popular reasons retirees choose to sell to Spring. Spring buys your home, unlike an estate agent, so there are no intrusive viewings which eliminates the risk of strangers or contagions entering your home. This is particularly important for those that are at risk, vulnerable or wanting to shield during the Covid-19 pandemic.

There is no need to spend money updating your home to sell, Spring will buy your property no matter its condition. Your dedicated property advisor will keep you updated at every stage and you choose your completion date to suit your onward move.

A Spring sale is guaranteed. Our trusted and transparent pricing is shared with you and you are covered by the Spring Price Promise, ensuring your home gets the best price it deserves. You will also benefit from Spring Secure, which grants you access to your property for up to 14 days after competition, so you can move safely and at your own pace.

Sell the Spring way and begin to enjoy your well-deserved retirement sooner than you think. Contact us today.

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