Claiming State Pension & Reviewing Other Pensions & Savings Ahead Of Retirement

Will I automatically receive my state pension at retirement age?

This is a common misconception. You’ve worked all your life and finally the time has come when you reach state pension age and you look forward to receiving the extra payment into your bank account each month, to either help with the bills, or to simply spend and enjoy.

However, you will not get your state pension automatically, you do need to claim it.

Claiming state pension

You should receive a letter within two months before you reach state pension age telling you what to do, however a few people may slip through the net and for some reason not receive this correspondence.

In this case, the quickest way to claim is by applying online. If you have not received your letter and you are within four months of state pension age, you can claim online using this link.

You can also apply by phone on 0800 731 7898 or download the state pension claim form (found here) and send it back to your local pension centre.

Why it’s important to review your other pensions

If you have pensions which you have paid into over the years, hopefully you will already be reviewing these on a regular basis with your financial adviser. But if not, it is important, now so more than ever, to take stock of your current situation and consider what to do with the rest of your money.

If you are also finishing work, the savings you have built up over your lifetime will now become your new ‘pay check’ every month. The rules surrounding pensions and the choices available have changed massively over the last 20 to 30 years and the options can be overwhelming.

A review of your pensions with a financial adviser gives you the chance to pause, look at your whole situation and to see whether the dreams and ideas you had for retirement can now come to fruition.

When reviewing my pensions should I look at other savings?

Definitely. Some clients have a number of different saving pots, including cash, investment bonds, ISAs and share portfolios. The assumption has historically been that if you have a pension, when you retire you use this to provide you with an income, but that isn’t necessarily the right decision.

A financial adviser can review all your options and structure your income to optimise your tax position. This includes looking at income tax, but also capital gains tax and inheritance tax. When we take all this into consideration it may be that your income can be generated from other savings and you don’t need to touch your pension.

Not using your pension, can reduce the inheritance tax liability for your estate, because pensions aren’t included in the inheritance tax calculation, thereby increasing the long-term financial security both for yourself and your family.

Financial reviews

Life expectancy is increasing and if, for example, we look at a female age 67 in reasonable health, if she lives to the average age of 89, she should plan for her income to last at least 22 years. There is also a 50% chance she may live beyond 89, therefore you need to think very carefully when you consider how long your income may need to last.

A financial adviser has the knowledge and skills to be able to advise you on the most suitable options for you and your family.

review pensionsHow Nelsons can help

Zoe Till is an Independent Financial Adviser in our expert Wealth Management team.

For further advice in relation to the subjects discussed in this article, please get in touch with Zoe or another member of the team in DerbyLeicester or Nottingham on 0800 024 1976 or via our online form.



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