Why do I need to think about retirement? What types of things do I need to plan for my retirement? Who can help me with my retirement plan?

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1 Contents: What is retirement planning? Why do I need to think about retirement? What types of things do I need to plan for my retirement? Who can help me with my retirement plan? FAQs Where can I go to get more help?

2 What is retirement planning? The term 'Retirement Planning' broadly refers to the process of working out what your retirement goals are, for example, deciding at what age you'd like to retire and the type of lifestyle you want in retirement; and then looking at ways you can achieve those retirement goals. In financial terms retirement planning refers to allocating finances for your retirement, such as setting aside money or other assets, which can be converted into a steady income at retirement to support you and your family. Retirement planning is usually started while you're still working and is an ongoing process of: establishing and reviewing your retirement goals finding ways of ensuring financial security throughout your retirement Retirement can last for ten, twenty or thirty plus years, how will you fill your time and support yourself for those years? Although it is a straight forward idea, when you look into it retirement planning can seem quite daunting, and as a result gets put off by a lot of people. However the earlier you start thinking about it the easier it will be to achieve your retirement goals. This booklet takes a simple approach to retirement planning and provides helpful information and links to useful contacts to get you started.

3 Why do I need to think about retirement? The reality is most people between the ages of 18 and 40 years, are fully occupied trying to study, hold down a job and/or raise a family so thinking about retirement planning doesn't feature highly on the priority list. However, increasing life expectancy, strained social security services and unreliable investment markets have created financial uncertainties which are forcing the Government and employers to increasingly transfer the responsibility for adequately funding our retirement back into our own hands. The purpose of retirement planning is to achieve financial independence which enables you to choose whether or not you want to work after retirement age, rather than being forced to. Because the state and our employers can't afford to pay for of us to retire in the manner we'd like, the following questions are becoming more important to think about: Am I ready to retire at the age, and in the way, I want to? Do I have sufficient funds to retire? What do I need to do to improve my retirement options? Retirement planning is not just about knowing if you will have enough income to pay for your essential living costs such as rent, council tax, food and heating. It's also about ensuring you have enough for non-essential living costs too. For example, most people in retirement want to be able to: Afford to live in and maintain their own home Go on holidays Run a car Treat family members Enjoy hobbies & pastimes Maintain the same standard of life they had when working Putting a retirement plan in place, not only allows you to maintain your accustomed standard of living, it may also enable you to fulfil lifelong dreams. Investing time earlier on in life, to think about and plan for retirement can not only increase how much you can accumulate financially, but can also increase your options at retirement and significantly reduce the risks of leaving things to chance. It's never too late to think about retirement planning, but the earlier you start the better!

4 What do I need to plan for my retirement? The table below outlines some of the key areas to think about in relation to retirement planning: Think about your... Health and lifestyle Work, skills and career Home and community Money Care How will this affect your retirement...? The health and lifestyle choices you make when you are young can positively or negatively influence your health and well being in retirement. Is it important to you to have a long and healthy retirement? Will you have grandchildren or family you want to be around for? Do you want to pursue active sports and hobbies? At retirement do you want to have reached your maximum earning potential and/or fulfilled your career ambitions? Will your current job and skills enable you to reach these goals? Where do you want to live when you retire? In your own home? In sheltered accommodation? With family? Do you want to retire overseas? What sort of community, i.e. people and activities will you want around you? What income will I have when I retire? What existing pensions do I have? What if I'm not able, or don't want to work beyond retirement age? What will my intended retirement lifestyle cost me? Do you need full or part time care now which will need to continue into your retirement? What if you need care during your retirement but family and friends are no longer with you? What can I do about it now? Making lifestyle choices such as a healthy diet, regular exercise and giving up smoking can significantly improve your chances of a long, healthy and active retirement. Retraining, taking on a course, going back to college, volunteering, alternative work experience can change the direction of your working life. Think about your longer term accommodation and community needs, identify potential locations in advance and research them. Does the area you live in now offer the community and facilities you want in retirement? Put in place a retirement budget and funding plan such as: Pension Tax efficient savings schemes (i.e. ISAs) Property investments (Buy to let etc) Investing in collectables/ jewellery etc. Setting up one, or a combination, of the above long term investments now will significantly improve your income options at retirement. Research different care options in advance such as: Staying at home - what support is available? Sheltered housing Residential or nursing care homes Add the potential costs of your chosen care option(s) into your retirement funding plan.

5 Retirement planning can seem daunting because it affects every aspect of your life. However, if you take each aspect individually and focus on the things which are important to you at the moment, retirement planning and research becomes easier to manage over time. Retirement planning is an ongoing process, you can add things to your plan every time you review it.

6 Who can help me with my retirement plan? An independent financial adviser who is a retirement planner or pension specialist is considered essential when arranging the financial aspects of your retirement plan. Financial advisers can help people planning retirement, and retirees, get the most out of their assets. They will conduct an in-depth analysis of your financial situation and draw up strategies tailored to your individual retirement needs. As well as advising you and setting up appropriate long term investments and savings, they can provide assistance with: Retirement and inheritance tax advice Making a will Equity Release schemes Retirement Annuities Suitably qualified financial advisers can be located via the Financial Services Authority register or through an independent search site like Unbiased.co.uk. There are also a large number of not for profit agencies such as Age UK (previously Age Concern and Help the Aged), the Citizens Advice Bureau, Which?, the UK Government's website Direct.gov.uk and The Consumer Financial Education Body (CFEB), which, along with financial and legal advice, can offer help and assistance with other aspects of your retirement such as: Understanding what state pension and benefits you will be entitled to Making a retirement budget Retrieving frozen or lost pensions Thinking how you'd like spend your time during retirement Finding out about doing paid or voluntary work What sort of activities and hobbies you might be suited to Getting more education during retirement Investigating lifestyle and care options Retiring overseas There are also an increasing number of online Retirement Planning companies who, for a fee or commission basis, offer a combination of services including financial advice, retirement lifestyle planning, education, relocation and housing services. Just doing an online search on the subject you are interested in, using specific words such as «working in retirement» or «retiring overseas» will bring up several links for you to investigate. A large number of books and magazines are available on the subject of retirement planning, available through local libraries, book shops and online. These publications are usually a good place to start your research as they cover all aspects of retirement planning in detail. Just taking small steps towards planning your retirement now can make a big difference later. Use a mixture of books, magazines and online resources to research your retirement needs, then use qualified advisers and agencies to help you put it all together.

7 Frequently asked questions Here are some frequently asked questions about retirement planning which may also assist: How old do I have to be to start planning for my retirement? There is no age limit for starting your retirement plan, it's never too early, there are huge advantages to starting to plan your retirement finances as soon as you enter the work force, even if it's just being aware of your state pension. As you get older it becomes more important to prepare retirement budgets to make sure the savings and investments you have in place will provide enough income to meet your needs in retirement, and if they won't provide enough income, taking steps to increase your retirement income. Even if you are close to retirement it always pays to revisit your options and check if there are any new or alternative schemes you can use to increase your retirement income and improve your retirement lifestyle. What do I do if I want to retire overseas? If you are considering retiring overseas, apart from ensuring you have up to date passports and visas, there are several things you'll need to look into, such as the effects on your finances, health and lifestyle. The UK Government website Direct.gov.uk provides assistance with retiring abroad including drawing a state pension overseas, tax and benefit implications. Depending on the country you choose and the length of time you intend to live there each year, your state pension may or may not increase annually as they do in the UK. If you retire within the European Economic Area (EEA) or to a country that has a social security arrangement with the UK your state pension will receive yearly increases and you may continue to draw on some UK benefits. You'll also need to find out what the costs and tax implications will be to transfer any private or employer pensions overseas. Research what your health and welfare options and rights are in your chosen country - will you need to take out health insurance? Other things to consider are, will you be keeping a property in the UK and abroad, will it be rented while you're not there? Will you want to take your car, or motor home or boat to your new country? What will happen to your pets? It's important to take the time to find out exactly what retiring overseas means before you commit to it. What does it mean when a pension is 'frozen'? The term 'frozen' can refer to an an occupational pension scheme where pensions owned by employees who no longer work for the sponsoring employer are 'frozen' until retirement age. Frequently, if the amounts are small, the member and the scheme administrators lose touch with each other, and as a result the pension is never claimed. The term 'frozen' can also relate to state pensions where the UK Government can 'freeze' state pensions for pensioners who live in certain overseas countries. Not all countries are included in the "frozen" list, most Commonwealth countries are included in the frozen list, and some non-commonwealth, non- European countries. Countries on the list mean UK pensioners get the same indexation as pensioners resident in Britain. All British State pensioners receive their pension based on the level of their compulsory contributions to the National Insurance Fund, and as payments are made within the UK they are all at the same level. However, if the beneficiary moves abroad, their level of pension is dependent on where they live.

8 How are my pensions affected if I retire early? You cannot claim your state pension until you reach state retirement age, but most personal and employer pensions can be drawn from the age of 55 years or even earlier if your pension has been transferred overseas. What state benefits become available to me when I retire? In addition to the Basic and Additional state pension, under current legislation you may be entitled to one or more of the following state benefits, some of which are age dependent and some income dependent, when you retire: Over 80 pension Pension credit Winter fuel payment Cold weather payment Warm front grant for heating improvements to your home Attendance Allowance for home help costs if you are disabled or ill Carers Allowance if you look after someone who is severely disabled Christmas Bonus Funeral Payment Community Care Grants and Budgeting Loans Crisis Loans Housing Benefit Council Tax Benefit Free Bus Travel Free Eye Tests, prescriptions and help with other health costs TV Licence reduction fee War Widow's/Widower's pension Tax Free Personal tax allowance Married Couple's tax allowance

9 Where can I go to get more help? The following links may also provide additional help and information: The UK Government's website betterfuture.direct.gov.uk provides step by step assistance with your retirement planning whether you are just starting to think about it or are already retired. The Consumer Financial Education Body (CFEB) has several guides on retirement planning and managing your finances in retirement including their guide Managing in Retirement. Which? Advice's online guide Planning your retirement covers your retirement countdown, other retirement options, state pensions and helpful contacts. The National health Service (NHS) offers several online resources for maintaining your health and well being now and in retirement, including: MidLifeCheck a free online health service for people aged over 40, from weight to smoking, stress to exercise, it will help you find out how you're doing. Making a Change4Life provides access to information from healthy eating to fun activities in your local area. Learning can be fun and a great way to relax and socialise during retirement. Develop an existing interest or learn something new via the UK Government's Adult Education and Learning website. The Pensions Advisory Service (TPAS), is an independent voluntary organisation, grant-aided by the Department for Work and Pensions (DWP). They provide information and guidance on all pension matters, including state, company, personal and stakeholder schemes. For tax enquiries regarding your pension or questions about how your pension and entitlements may be affected if you retire abroad HM Revenue and Customs have some helpful online fact sheets at: If you plan on retiring overseas check the List of countries the UK has social security agreements to see where your state pension benefits will still increase yearly. Reputable retirement planning advisers should be a member of the Financial Services Association (FSA). Check the FSA register at to see whether your provider is registered and regulated by the FSA. If you've lost details about a pension scheme (including work related pensions) and need help contacting the provider, The Pension Tracing Service may be able to help, contact them at:

10 The BBC Raw online site has helpful information, questionnaires and real life case studies to help you start planning for your retirement. Saving and investing for your retirement can be complex so always take independent financial advice, find a suitable Independent Financial Advisor who is also a retirement planning specialist through unbiased.co.uk.