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Thursday, 3 September 2009

Guide to planning for retirement

Planning for your retirement is important. You may look forward to your retirement as a time when you can have the freedom to do what you want. Before you retire, it's worth planning your finances to make sure you get the most out of this time in your life.

What to expect when you retire

When retirement's on the horizon, you'll be thinking of your pension and financial planning. However, your complete retirement from work or changing work patterns – such as becoming a part-time or temporary worker – will also mean changes in your lifestyle. It's important to consider the emotional and practical implications of these changes.

Saving for retirement

Saving for your retirement is one of the most important financial plans you can make. You can choose to save in a pension scheme and/or a savings plan, but whatever you decide, you'll want your funds to grow and be worth as much as possible in the long-term.

Types of pensions

Find out about the different types of pension schemes – including the State Pension, personal and stakeholder pensions, and company (occupational) pensions.

Forecasting your pension

It's a good idea to check how much pension you'll receive on retirement, so you can take action now if you think you won't have enough to live on when you retire. You can do this by getting a forecast of what your State Pension or other pensions will pay.

How to catch up if you've got little or no pension

If you have little or no pension you might want to consider starting a personal pension, as well as looking into any options for saving for a pension through your work. A good place to start is to find out how much State Pension you will be entitled to.

What to do about gaps in your National Insurance record

You can get a State Pension if you've paid enough National Insurance contributions (NICs) - or are treated as having paid enough of them - during your working life. If there are gaps in your NICs record, your entitlement to the State Pension might be affected. You might want to consider filling in the gaps by paying extra contributions.

Pension rule changes from 2006

Since April 2006, simpler rules have been applied to both personal and company (occupational) schemes. The new rules allow most people to pay more into their pension schemes – and on more flexible terms.

Getting information and help with pensions

Information about the different types of pensions is freely available from several organisations. Some have advisers who will help you understand your pension options. For advice tailored specifically to your needs, you should consider speaking to an authorised financial adviser, but you may have to pay for their advice.

Choosing and using a pensions adviser

If you're considering taking out a stakeholder or personal pension you can shop around yourself, but it can be a good idea to get financial advice from a specialist before you buy. For information on a pension offered by your employer, speak to your employer’s HR department or pension scheme provider.

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