Preparing to Retire: A Money Checklist

Retirement is not one decision but a run of them: when to stop work, when to take the State Pension, how to turn pension savings into income, and how to make the money last. The first fact to pin down is your State Pension age, because several other things hang off it, including when you can claim Pension Credit and when you stop paying National Insurance. That age is currently 66 and is rising to 67 between April 2026 and March 2028¹, so anyone planning a retirement date in the next few years needs their exact date rather than a rough guess.

The second fact is how much income you will actually need. The Retirement Living Standards, published by the Pensions and Lifetime Savings Association, give three benchmark budgets, minimum, moderate and comfortable, and in 2025 they put comfortable spending for a couple at around £60,600 a year and for a single person at £43,900². The third is that free, impartial guidance exists: Pension Wise, a government service launched in April 2015, offers appointments to help you understand your options before you take any money out³.

This page walks through each of these in turn, and ends with the rest of the checklist: the minimum pension age, tax, and planning for later life.

Step one: check your State Pension age

Your State Pension age is the earliest age at which you can start receiving your State Pension⁷. It is worked out from your gender and date of birth, and because the age is rising in stages, people born only weeks apart can have different retirement dates. Someone born between 6 April 1960 and 5 May 1960 reaches State Pension age at 66 years and 1 month, while someone born between 6 March 1961 and 5 April 1977 reaches it on their 67th birthday⁸.

The reliable way to get your own date is the official online calculator, which checks both your State Pension age and your Pension Credit qualifying age⁷. Independent sources, including Which?, offer their own calculators, and these give the same statutory timetable: the age is rising gradually from 66 to 67 between April 2026 and April 2028⁴. If you are already over State Pension age and need to sort out a claim, contact the Pension Centre, or in Northern Ireland the Northern Ireland Pension Centre⁹.

Checking the date is only half the job. You also want to know how much State Pension you are on track to receive, and whether there are gaps in your National Insurance record you could fill. The official forecast service shows both, and it can be checked from the same government pages. Bear in mind that your State Pension is calculated differently if you reached State Pension age before 6 April 2016, when the old State Pension with two parts still applied⁸.

The move to 67, and the uncertain date for 68

The rise from 66 to 67 is settled law. The Pensions Act 2014 provides for the increase in pensionable age to 67 to take place between 6 April 2026 and 5 March 2028, bringing forward an earlier timetable that would have seen the change happen between 2034 and 2036¹⁰. People born on or after 6 March 1961 but before 6 April 1977 reach pensionable age on their 67th birthday¹⁰. The same Act applies to England, Wales and Scotland¹¹.

The rise to 68 is less certain. Current law allows for State Pension age to increase from 67 to 68 between 2044 and 2046, and people born from 6 April 1978 onwards can expect to claim from their 68th birthday¹². But independent guidance notes the scheduled rise "could be brought forward to as early as 2037"⁴, and the Office for Budget Responsibility's welfare projections have assumed the increase to 68 takes place in 2037 to 2039 rather than 2044 to 2046¹³. The two positions have not been reconciled, so anyone born after April 1977 should treat their State Pension age as provisional.

For context, these ages are historically high. From the 1940s until April 2010, State Pension age was 60 for women and 65 for men¹⁴. The equalisation to 66, reached in October 2020, and the staged rise now under way, mean the retirement date you planned in your forties may not be the one that applies¹².

Reaching State Pension age does not mean you have to stop work

There is no rule that ties leaving work to your State Pension age. Anyone can continue working past State Pension age, and the default retirement age, formerly 65, was abolished, so most people can now work for as long as they want¹⁵. You can also claim the State Pension while you are still working, as long as you have reached State Pension age¹⁶.

Working longer can improve your finances in more than one way. If you have reached State Pension age but are under 75 and earning more than £10,000 a year, your employer will not automatically enrol you in their workplace pension, but you have the right to join if you want to, with both of you contributing and possible tax relief¹⁷. You also stop paying National Insurance once you reach State Pension age¹⁸.

If you keep working and keep paying into a workplace pension, the pot continues to grow. And if you stop paying into a scheme, the money is not lost: you will still get that pension when you reach the pension scheme's own age¹⁹. Equally, if you have reached the age at which you can start claiming your workplace pension, you do not need to stop work in order to claim it¹⁵. The two decisions, when to claim and when to stop earning, are separate.

Working out how much income you might need

Once the dates are clear, the harder question is how much income retirement actually requires. MoneyHelper offers a free budget planner to list all your likely costs after retirement, which is the practical starting point: many people underestimate spending in the early, active years and overestimate how much it falls later²⁰.

A floor exists beneath all of this. Pension Credit is an income top-up for pensioners, and its qualifying age is linked to State Pension age, currently 66 for both men and women and rising gradually to 67²¹. The government's own guidance gives worked examples of the income levels at which people qualify, for instance a single person who reached State Pension age before 6 April 2016 with weekly income below £240.90 in the example quoted²². Because entitlement depends on income and circumstances rather than savings alone, a retirement budget should always include a check. Entitlement calculators, including the official ones, will work out whether you qualify.

Beyond the floor, the useful benchmarks are the Retirement Living Standards, covered next. They give a reality check on what "enough" looks like at three different lifestyles, and they are the figures most pension bodies now use when talking about target incomes.

Retirement Living Standards: minimum, moderate and comfortable

The Retirement Living Standards were launched by the Pensions and Lifetime Savings Association in October 2019 and are pitched at three levels, minimum, moderate and comfortable, based on a basket of goods and services²³. In 2023 they were rebased, starting from scratch with groups of members of the public describing what they thought different lifestyles required². The figures below are from the 2025 edition.

These are spending figures, excluding housing costs such as rent, and they come from independent analysis of what people actually spend²⁴. The comfortable level for a couple works out at £1,201.52 a week before rent². The levels are updated for inflation: in the year to April 2025, overall CPI inflation rose by 3.5%, the same as the average increase across all the retirement living standards².

The labels matter less than the gaps between them. The jump from minimum to moderate is larger, in percentage terms, than the jump from moderate to comfortable, because minimum covers little beyond essentials. A useful exercise is to match each level's description against your own expectations: if the moderate description sounds like the retirement you want, the moderate figure is the income to plan for, and the State Pension will cover only part of it.

What the targets assume, and how London differs

The headline figures are UK-wide averages, and the biggest single variable is housing. The Retirement Living Standards are quoted excluding rent, and the 2025 data shows how much rent changes the picture: for a single retiree at the minimum level with no rent to pay, annual spending is £13,902 outside London but £14,630 in London, and for a single retiree renting privately the weekly budget is £615.41 in London against £397.58 outside².

London's costs run through everything connected to housing. Official statistics on housing purchase affordability show a wide spread across London local authorities, with a difference of 26.1 years of income between the most and least affordable in the financial year ending 2024²⁵, and the methodology work behind those measures notes that disposable household incomes in London behave differently from full-time earnings elsewhere²⁶. Home ownership schemes recognise the same premium: the Right to Shared Ownership sets an income requirement of £90,000 or less annual gross household income in London, against a lower threshold elsewhere²⁷, and the HOLD scheme for people with a long-term disability likewise uses £90,000 a year in London²⁸.

In practice, this means a Londoner renting privately needs a substantially larger income to reach the same standard of living as someone who owns their home outright, and the national headline figures understate what is needed. Anyone planning to retire in London, or considering moving in or out of the capital, should redo the budget with their own housing costs rather than relying on the averages.

Minimum pension age: 55 now, 57 from April 2028

Separate from the State Pension age, there is a minimum age at which you can normally take money from a private or workplace pension. It is currently 55, and it is rising to 57 in April 2028⁵. This is the age at which you can start drawing from defined contribution pots, and it applies regardless of when you stop work.

The gap between the two ages is where most retirement planning happens. Someone who wants to retire at 60 cannot yet rely on the State Pension, which starts at 66 or 67, so the years in between must be funded from pension savings, other savings, or continued earnings. Taking a pension early reduces what is left for later: official guidance notes that retiring early affects your pension, because the pot has less time to grow and must stretch over more years²⁹. Some schemes also apply reductions to pension amounts taken before the scheme's normal pension age.

Free guidance from Pension Wise before you take a pension

Before taking any money from a defined contribution pension, free guidance is available from Pension Wise, a government service offering free appointments⁶. It was launched in April 2015 alongside the pension freedoms, and offers free face-to-face and telephone guidance alongside its website³. In 2024 a digital appointment format was added³⁰, and the service has since celebrated a decade of helping people understand their pension choices³⁰.

Appointments are normally for people aged 50 or over. If you are under 50 you can still have an appointment if you are retiring early due to poor health, you have inherited a pension, or your scheme lets you take your pension before 55³¹. Separately, the Money and Pensions Service sends a step-by-step guide on taking a pension to policyholders from age 50 and every five years after that until they access their pension³².

The digital option is designed to fit around your schedule, so you can start the appointment and pick it up again in your own time³⁴. Whichever route you use, the appointment is free, and nothing is sold during it.

What Pension Wise does, and where it stops

Pension Wise is described by the official guidance as "a free and impartial government service that helps you understand your pension options"³⁵. An appointment can help you find out when you can access your pension pots, the different ways to take money from your pension, how each option is usually taxed, and how to spot and avoid scams³⁰. Those options include taking the whole pot in one go, keeping it invested and adjusting the income you draw, or buying a guaranteed income⁶.

What it does not do is recommend. Guidance explains the options; it does not tell you which product or provider to choose. That is regulated financial advice, which is paid for separately. A further limit is on follow-up: the government does not currently track Pension Wise customers to examine the decisions they ultimately make about pension products³⁶, so the service's own evaluation of how choices turn out is limited.

One point of process is worth knowing if you are in a trust-based scheme. Under arrangements examined by the Work and Pensions Committee, if you want to opt out of a Pension Wise appointment you cannot do so at the moment you are offered one; you have to proactively contact your scheme to opt out³⁷. In other words, the offer may arrive without you asking for it, and declining takes a separate step.

The rest of the checklist

With the dates, the income target and the guidance arranged, the remaining items are about tying the plan together and preparing for what comes after.

Trace and gather your pensions. Most people accumulate several workplace pensions over a working life. If you stop paying into a scheme, you still get that pension when you reach the scheme's age, so old pots are worth finding and valuing¹⁹. The government's pension tracing service and the guidance on making the most of your pension cover this²⁰.

Check the tax position. Income tax still applies in retirement, and the State Pension, pension income and any earnings combine for tax purposes. The way your personal pension is paid, and the tax treatment of different withdrawal options, is set out in official guidance³⁵, and a Pension Wise appointment covers how each option is usually taxed³⁰.

Public service and NHS pensions. If you have a public service pension, special rules can apply. Annual pension increases are only paid in full to members who have reached age 55, or, if under 55, to those who retired on ill-health grounds, widows, widowers or those receiving a dependant's allowance³⁸. Members affected by the public service pensions remedy may also face reporting deadlines, including 31 January 2027 for pensioners affected before 1 October 2023³⁹.

Plan for care and later life. Retirement planning should include the possibility of needing care. A care needs assessment and a financial assessment determine what help the local authority provides and what you pay towards it, and the rules differ between England, Scotland, Wales and Northern Ireland. Making a will, and considering a power of attorney before it is needed, are part of the same preparation.

Keep the plan under review. The State Pension age is increasing and is regularly reviewed⁷, the minimum pension age rises in 2028⁵, and the Retirement Living Standards are updated each year². A retirement plan built today should be rechecked every few years, and always before any irreversible decision such as taking a whole pension pot in one go.