Have you started thinking about retirement?

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A third of people in the UK don’t have a retirement plan ready, and of those who do, only 22% of them have a detailed plan in place for when they do retire.[1]

In 2024, the average weekly income of a pensioner was £282, or £14,664 a year.[2] That’s significantly less than the average annual salary for a full-time employee, which stood at £37,430 in 2024[3]. With this in mind, it’s easy to see why preparing financially for retirement is so important.

What will your retirement income look like?

Most people in the UK will receive the State Pension, as long as they meet the eligibility requirements. The full rate of the new State Pension is £230.25 a week – that’s about £11,973 a year.

However, the actual amount you receive could vary depending on your National Insurance record, so it’s a good idea to check your forecast on the GOV.UK website.[4]

Given the rising cost of living, many people choose to top up their retirement income with a private or workplace pension.

Do you have a private pension?

In 2024, around 75% of adults had a private pension in addition to their State Pension.[5] But for many, contributing to a private pension isn’t affordable. In fact:

33% of adults aged 50+ without a private pension said this was due to cost.
10% felt it was too late to start.
Another 33% said they hadn’t considered it.

If you’re worried you’ve left it too late – it’s never too late to take control of your finances and explore your options.

Check if your employer has a workplace pension scheme

If you’re employed, your employer must offer a workplace pension scheme. If you meet the following criteria, your employer will enrol you into their pension scheme and make payments into your pension:

You’re a UK resident, usually working in the UK
You’re aged between 22 and the State Pension age (check your State Pension age)
You earn at least £10,000 a year

The minimum total contribution is 8% of your qualifying earnings – at least 3% from your employer and the rest from you. Some employers may choose to contribute more.

If you’re under 22, you can still ask to join the scheme – and your employer must let you if you’re aged between 16 and 74.

Use this calculator to see how much is being paid into your workplace pension.

What happens when you’re auto-enrolled?

Once you’ve been auto-enrolled, your employer will write to you explaining:

The date you joined the scheme
Details about the scheme, including who runs it
How much they’ll contribute and how much you’ll be paying
How you can leave the scheme
How tax relief applies to your contributions

When can you access your pension?

You can usually start drawing your workplace pension between ages 60 and 65, with some providers allowing access from 55.

In some circumstances, including if you’re retiring early because of ill health, you may be able to access your money before you turn 55.

When you reach your pension maturity date, you can take 25% of it tax-free as a lump sum and receive the rest as a monthly income, which will be taxed as normal.

If you try to withdraw money from your pension before you turn 55 without qualifying reasons (like ill health), this could result in a 55% tax charge.

Have you started thinking about retirement?

What will your retirement income look like?

Do you have a private pension?

Check if your employer has a workplace pension scheme

What happens when you’re auto-enrolled?

When can you access your pension?

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