Can't afford to retire yet?

This can be frustrating, however there are plenty of things you can do to boost your retirement income.

How can you boost your income in retirement?

CARRY ON WORKING AND ACCESS YOUR PENSION POT LATER

Although you may be able to take your pension from age 55 (changing to age 57 on the 6th April 2028), the longer you leave it invested, the longer it has the potential to grow until you decide to take money from it.

Use your pension later. You can also continue to contribute to your pension, which may increase its value.

To see what your pension could be worth, please use our Pension Calculators.

You can claim your State Pension once you reach your State Pension age. However you don't have to. Your State pension will increase every week you defer, as long as you defer for at least nine weeks.

Deferring your State Pension

USE YOUR PROPERTY

If you own a property you’re in a great position as you could:

  • rent out a spare room
  • sell and downsize to a smaller property
  • move to a different area.

If you rent, you may be able to reduce your rental amount by moving elsewhere.

WORKING IN RETIREMENT

There's no longer any fixed retirement age in the UK. This means you can usually chose to continue working as long as you'd like, even if you've accessed your pension.

There are some jobs which have an age limit, for example the fire service. If you need to retire from your job due to an age limit you can still chose to work in another occupation that doesn't have a limit.

So what are your options? Let’s take a look

OPTION 1: CONTINUE TO WORK AND DEFER TAKING YOUR PENSION

You could leave your pension invested until you’re ready to take an income from it. You can defer taking your state pension too. It's also possible to continue to contribute to your pension at this time, which may also increase its worth.

To see what your pension could be worth, please use our Pension Calculators.

OPTION 2: TAKE MONEY FROM YOUR PENSION AND CARRY ON WORKING

This can be a good way to top up your monthly income. However, while you can normally take up to 25% of your pension as tax-free cash, you would have to pay income tax on the rest.

As an example, let’s look at how much your weekly income could be if you were to keep working but also took the State Pension and an income (annuity) from your pension (assuming a personal allowance* of £12,570, you’ve reached your State Retirement Age and you are entitled to the full State Pension):

*The personal allowance is the amount of income you can receive in a tax year before you start paying income tax.

 

SOURCES OF INCOME   WEEKLY FIGURES
State pension   £203.85
Annuity payments + £100
Income from work + £250
Total income before tax = £553.85
Tax £62.42
Your total net weekly income would be: = £491.43

This example is for a non-Scottish resident.

Tax treatment depends on your individual circumstances. Your circumstances and tax rules may change in the future.

IS DEFERRING RIGHT FOR YOU?

Read our case study: Nigel’s story

DID YOU KNOW

DID YOU KNOW

Your can choose to carry on working while also taking your pension benefits. 

I'm approaching retirement

Taking your pension doesn’t mean you need to retire. If you want to continue working, there are some important things to consider.

Your Scottish Widows Pension

Your Scottish Widows Pension

If you have a pension with Scottish Widows already and want to put more in, visit our Individual Pensions page for more information.

Your Scottish Widows pension

PENSION WISE FROM MONEYHELPER

PENSION WISE FROM MONEYHELPER

This free and impartial service helps you understand your pension pot options so you can choose the right one for you.

Provided by MoneyHelper, a government organisation, it offers clear and simple guidance online or over the phone.

Go to Pension Wise Go to this page to use Scottish Widows retirement calculators

Pension basics

Pension basics

Whatever stage of the retirement journey you’re at, get the basics before you go any further.

Pension basics