Retiring in 2021 (or beyond)…make sure you have a plan

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A recent survey of people who have already or plan to retire in 2021 provides some interesting insights, whether you intend to retire soon or in the future.  

The average age of people planning to retire in 2021 is 60, according to a recently published survey by investment manager Standard Life Aberdeen. That is six years before the current state pension age, which will rise from 66 to 67 between 2026 and 2028. Those 2021 retirees will, on average, live for another 25 years if they are men, and 27 if they are women, according to the Office for National Statistics (ONS). A quarter will survive to age 92 and 94, respectively, implying over a third of their life is spent in retirement.    

The Class of 2021 report found 37% of respondents had brought forward their retirement date because of the Covid-19 pandemic – a reminder of the importance of building flexibility into your retirement planning. Perhaps the acceleration of plans also explains why typically only about two in five individuals feel very confident they are financially ready to finish work. This lack of financial confidence does show up in other responses within the report: 

  • Nearly half intended to cut their spending to support their retirement 
  • Just over a quarter said they would work part-time for the same reason 
  • One in five planned to sell their property or downsize to meet their retirement costs 

Those costs may have been underestimated, as the average planned retiree’s household spending was £21,000 a year, almost a third less than the average 2020 household income, according to the ONS. 

Perhaps the most concerning statistic was not one directly supplied by the retirees, but the result of an assessment by the survey’s sponsor, the Pensions and Lifetime Savings Association. The association calculated that even using the £21,000 annual spending target and allowing for the eventual arrival of the state pension, two-thirds of the 2021 retirees were at risk of running out of money. The association estimated that a savings pot of £390,000 was needed to cover 30 years of retirement expenditure. 

If you fail to plan, are you planning to fail?  

If you are 50 or over it is a crucial time when saving for retirement with a number of questions you might want to ask yourself to help you plan better. 

When do I want to retire? Can I retire early if I want/need? How much income do I need in retirement? What type of retirement do I want to have? Do I have enough in my pension pot to retire comfortably? How much will my state pension be? These are just some of the questions you should ask yourself.  

It’s important to make retirement planning a priority if you haven’t done so already. At this age, retirement is no longer a distant concept and time is short if your plans aren’t on track. Now is the time to think about your retirement income goals and the steps that you need to take to achieve your goals.  

There are many variables to consider including the age that you plan to retire, your health, hobbies or goals you want to pursue, and your retirement income requirements, alongside inflation, tax rates, and whether you qualify for the state pension. Given the number of variables, this part of the retirement planning process is not always straightforward. The balance between your income and your outgoings will be more important than ever. Many people think about their retirement income but can often misjudge controlling their outgoings in the build-up to and during retirement.  

It’s also important to review your retirement planning regularly alongside your other personal finances. A regular review will ensure healthy progression towards retirement by checking that you are firmly on track with your retirement goals. This is the time to adjust your plan to fit any evolving needs and desires for your post-retirement years. We all change as people over time, and our pension pot needs to reflect our most current reality.  

Retirement planning is a continual process, and the more often you review your progress, the more prepared you’ll be for retirement when you get there and the more in control you’ll feel. At a minimum, aim to review your retirement planning at least annually to ensure that you’re on track to achieving your retirement goals. 

At Armstrong Watson, we are Chartered Independent Financial Advisers. Whatever stage you’re at, we’ll give you a clear idea of how much you’ll need to afford the lifestyle you want in retirement and provide regular reviews to help keep you on track. 


Contact Matthew Slessor on matthew.slessor@armstrongwatson.co.uk or call 01228 690006

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  • 30th June 2021

The deadline for July 2021 claims is 16th August 2021. If you require our JRS team to submit your claims please send them to jrs@armstrongwatson.co.uk by 11th August 2021. For details on the changes to the scheme visit our CJRS page.