Making the right decisions for you
Deciding when to retire and how to take your pension can seem overwhelming. It may help to take stock of your pension and break things down using the steps below. Select each step in turn to find out more.
Think about what your costs will be when you retire
You can probably picture the retirement you want – holidays, time with family and friends, a few improvements on the house, and a new car, maybe?
But do you have any idea how much this might cost or whether you can afford it? Use the tools below to find out.
How much will retirement cost you
You can use the 'Retirement Living Standards' (RLS) for a general idea of how much you might need when you retire, depending on the type of lifestyle you want to have.
The RLS were created by the Pensions and Lifetime Savings Association (PLSA) and Loughborough University, and show roughly how much you might need each year, based on 3 different standards of living.
We’ve included a summary of the RLS below. Costs will be higher in London than those shown.
Visit the Retirement Living Standards website for more information.
A personalised estimate of how much you might need
For a more personalised estimate of how much you might need when you retire, you can use our Lifestyle Calculator.
The calculator uses the Retirement Living Standards above as a starting point and then lets you adjust individual costs, such as leisure and travel expenses, to suit your own needs.
This means you will get a personalised summary of how much the lifestyle you hope for could cost you each year.
While this is not a guarantee, it does give you a general target to aim for with your retirement income.
From 6 April 2028, the Minimum Pension Age will be increased from 55 to 57. If you will reach age 55 on or after 5 April 2028, you may not be able to retire before 57. Find out more about this measure on the government’s website and on the your retirement options page under "early retirement minimum age".
We haven’t updated our estimates process or planning tools to reflect this change yet. So although you can still request an estimate, from age 55 the information quoted may not be accurate.
Lifestyle Calculator
Use this tool to work out how much money you might need to pay for the retirement you want.
Consider how you will pay for your costs when you stop work
You may have several sources of income when you retire.
Find out what each of them are likely to be worth and add them together to see how much income you might have in total.
Some of your money may come from:
- your Magnox pension – check your Annual Benefit Statement or request an estimate to find out how much your pension might be worth when you retire. Log in to your myESPS account to find out more.
- your State Pension – the amount you receive is set by the government. You can request an estimate on the government’s website.
- other pensions – you may have a private pension or pensions linked to previous employment. You’ll need to speak to each of the providers individually for estimates on those accounts. If you’ve lost their contact details, the Pensions Tracing Service may be able to help. It’s a free, government-backed, service available online and over the phone on 0800 731 0193. Other companies offer a similar service but many charge a fee. Visit the government's website to find out more.
- savings and investments – if you have savings outside your pension, get those statements from your bank or other provider
How to request an estimate
Use this step-by-step guide to help you understand how to request an estimate online using your myESPS account.
Keep in mind your income could be affected by:
- life expectancy
- changes in the law, including tax allowances
- rates of inflation
See if you’re on track and understand the options available
Check if you’re on track to fund your future by comparing your income target from the Lifestyle Calculator with the amount you expect to have coming in from your Magnox pension and other income sources as detailed above.
These figures may change depending on how and when you decide to take your pension, so it’s important you understand the options available to you and what impact they might have on how much you get. Find out more on the pages linked below:
Look at what you can do if the numbers don’t add up
If you’re worried that the income you will have when you stop work won’t cover your expected costs, there are a number of things you can do before you stop work. This includes:
- Topping up your pension– think about paying more into your pension if you can. This is known as making Additional Voluntary Contributions (AVCs). It’s tax-free up to certain limits. You can make AVC payments regularly or as one-off payments. Visit the AVCs page to find out more.
- Thinking about working after your scheme’s normal retirement age – you can delay taking your pension. This would give you more time to build up your benefits. This is an important decision and we suggest you speak with a Financial Adviser first. Check the retirement options page for details on retiring at different times.
- Clearing your debts – if possible, pay off any debts you owe before you retire.
Get advice if you need it
You may want to get expert help before making any changes or taking your pension.
Visit the help and useful links page for details on who to speak to for support.
If you’re ready to start taking your pension visit the taking your benefits page. It will tell you what to do next.