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Managing my investments
Managing my investments

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Week 5: Investing for retirement – planning your pension


Watch the following video to hear Martin introduce Week 5 of Managing my investments. This week covers the crucial subject of pension planning.

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Making provision for your income in retirement is a critical aspect of your overall investment strategy. It requires long term forecasting of your income needs in retirement and the returns from your pension products intended meet those income needs. Given the recent liberalisation of pension rules in the UK, there are now more options for using the ‘pension pots’ built up ahead of retirement. While this has been generally welcomed, this liberalisation has created uncertainty about the best options to utilise the money built up for retirement.

When planning for income in retirement, it is clearly essential to take into account the state pension you may be entitled to. When you have forecast your state pension, you will have a clearer idea about how much income your own pension plans (e.g. occupational pension or personal pension) will need to generate to provide the total income you need in retirement. In the UK, state pension arrangements are going through a period of transition with the state pension age being pushed back and with the roll out, from 2016, of the new ‘flat-rate’ state pension.

There’s a lot to examine this week, particularly given the concurrent changes to the pensions landscape. But the effort will be worthwhile, since you will gain greater clarity about what you need to do now to ensure a comfortable retirement in the future.