Retirement planning: 3 useful ways to help boost plans and avoid common regrets

Category: News

Retirement planning aims to help you develop a road map towards your desired level of comfort in retirement. It can involve many proactive steps to boost your financial and emotional wellbeing, and ultimately leave you as prepared as possible for life after work.

Yet, a significant portion of retirees hold regrets over their planning decisions. According to a study by MoneyMarketing, 32% of UK retirees would make different choices to better prepare for their retirement if they could.

The Hungarian American film director, Michael Curtiz, once said: “The only things you regret are the things you don’t do”. Working with a financial planner today to ensure your plans are aligned with your retirement goals can go a long way towards assuaging your retirement concerns.

Read on to discover three useful ways to boost your retirement plans and avoid the common regrets that UK retirees harbour.

1. Maintain and boost your pension contributions

A retirement income shortfall is a serious concern for many soon-to-be and recent retirees.

According to Unbiased, 1 in 6 Brits over the age of 55 have no pension savings outside of the State Pension. Meanwhile, the Express reports that 38% of working-age people, or almost 12.5 million Brits, are failing to adequately save for their retirement.

It is a problem that is being compounded by the ongoing cost of living crisis, which has prompted many households to make cuts to their outgoings. The long-term consequences of cutting workplace pension contributions could be considerable, despite opting out being one way for Brits to pursue savings.

Aviva reports that almost 1 in 4 Brits are choosing to opt out of auto-enrolment, withdraw funds from their pension, or plan to reduce, pause, or stop their monthly contributions to help alleviate current financial pressures.

Pensions are an extremely efficient way of growing your wealth over the long term, so it’s vital that contributions are maintained, and where possible increased, to ensure you have enough set aside to provide for your retirement needs.

Workplace pension contributions benefit from:

  • Pension tax relief on contributions
  • Pension investment growth being tax-free
  • Essentially “free money” in the form of employer contributions.

Working with a financial planner to find alternative ways to help reduce short-term financial concerns and opting to maintain your pension contributions could be an incredibly valuable decision in the long term.

2. Work towards being as tax efficient as possible

According to MoneyMarketing, 20% of retirees wish they had considered a more tax-efficient approach to their retirement plans. As mentioned, workplace pension contributions are a tax-efficient way to boost your retirement savings.

However, there are other ways you can pursue beneficial tax treatment and leave yourself better financially equipped to provide for your needs in retirement.

One potential option is to consider moving some of your funds into a Stocks and Shares ISA.

Any gains made on investments within a Stocks and Shares ISA are free of Capital Gains Tax (CGT) and dividends are also tax-free. Income drawn from an ISA is often tax-free and you can invest up to the annual ISA allowance, which is ÂŁ20,000 for the 2022/23 tax year.

A financial planner can help guide you towards the most tax-efficient ways to grow your long-term investments and protect your hard-earned savings. This can boost your wealth during retirement.

3. Consider the pros and cons of an annuity

MoneyMarketing’s study found that one of the biggest regrets retirees have is not ensuring a guaranteed income throughout retirement. This regret is greater among those with the largest retirement pots.

One method of guaranteeing a retirement income is to purchase an annuity.

An annuity is a form of insurance product in which you use your accumulated pension pot to buy a regular income payable throughout your retirement.

This income is guaranteed for life, so if you end up living a long time — which is becoming increasingly likely with rising life expectancies — you may get back more than you originally paid.

According to FTAdviser, rising average annuity rates means the break-even point for earning back your original pension is likely to be just 15 years.

The level of income you receive from your annuity will likely be determined by a variety of factors, including:

  • The size of your pension pot
  • Your age
  • The provider’s annuity rates
  • Your health.

There are many types of annuities that can cover various scenarios, such as enhanced annuities that may cover potential health issues, or joint life annuities that can provide for a surviving spouse or civil partner should you die first.

Annuities offer stability and security, but there are downsides too, such as:

  • Your regular annuity payments (once tax-free cash has been taken) are taxed as income, so could be liable for Income Tax
  • They are irreversible, so once you’ve purchased an annuity with your retirement savings (and any cancellation period has expired), you can’t change your mind
  • Once you purchase an annuity that purchase price is locked in and your funds are no longer invested so you’ll want to be certain before you take the plunge.

MoneyMarketing’s study found that while 30% of retirees regretted not having a guaranteed income, 19% wished they’d pursued greater financial flexibility. Before making any major decisions, discuss your options with us to ensure it’s the best choice for you.

Get in touch

Retirement is supposed to be your opportunity to relax after years of hard work, allowing you to finally live your ideal lifestyle. It is important that you don’t find yourself harbouring regrets and wishing you’d made alternative plans.

Working with a financial planner can go a long way towards reassuring you and alleviating any concerns. The first step is to reach out by contacting us at or calling 020 8941 9779.

Please note:

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.

Investments carry risk. The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.