If you read the personal finance press at the moment you will no doubt notice that there’s a lot of doom and gloom when it comes to the prospect of retirement. “Will you be able to afford to retire? Many think they won’t,” says the media while also reporting on the closure of final salary pension schemes and the fact that at least one in seven people due to retire in the next year or so don’t have a pension. Yes, given issues with debts and interest rates, as well as the economic problems since 2008, things are difficult. However, it is possible to find a way to live comfortably in retirement with our useful list of tips.


1.Start planning now. Whatever age you are when you’re reading this, you can do your retirement prospects no harm by starting to save for a pension with your next salary payment. A pension is very much like putting away savings every month – if you don’t do this automatically then it’s very easy to overlook it. Even if you’re not contributing a huge amount, this will add up over the years.
2.Make your National Insurance payments. These will vary depending on what you do for a living – and may be dealt with by an employer if you’re not self employed – but they are key to giving you the best chance of receiving a state pension when you get to pensionable age. Yes, it’s unlikely that the state pension will amount to a huge figure if you retire in 30 or 40 years but every little helps and you will be entitled to something as long as you make those National Insurance payments.
3.Calculate how much you’re likely to need for your retirement. Figures vary of course but the most recently reported estimates from the National Employment Savings Trust (Nest) are that you’re likely to need around £15,000 a year to live on in retirement. Factors to bear in mind are whether you’ll be paying rent, whether you plan to have any holidays, whether you will need to maintain and drive a car and what your extras will be (for example, home improvements, socializing or sports club memberships).
4.Pay off your debts early. The sooner you are debt free, the sooner you stop losing money on monthly interest payments. Whether you have loans or credit cards, or you’re planning on taking out a mortgage, choose the shortest possible term that still makes meeting the monthly repayments a manageable task. Although an essential part of life for almost all of us, debts are probably one of the biggest worries for pensioners so plan to reduce yours gradually and clear them around five years (or more) before you plan to retire.
5.Plan to cut your costs. If you’re close to retirement and don’t have as much in the pot as you had hoped then start looking for ways to help cut the cost of your golden years. Rents in the UK are some of the highest in the world, especially in London, so it might make sense to move overseas for a couple of years and enjoy the sunshine, while paying a cheap rent and earning a much higher rental income from a UK property. Are there ways that you could cut the cost of living? For example, if you want to cut car or transport costs might a move to a more convenient location be a better choice? Some people are also looking into the idea of sharing retirement costs – if you live close to others in a similar situation you could club together to meet the costs of carers/cleaners/handymen etc.
6.Carry on earning. Whether you don’t have a choice but to carry on earning or you don’t really want to retire 100%, there are still ways to keep generating an income no matter what your age. You might want to invest in a buy to let property – something many are considering now that it’s possible to take a proportion of a pension as a lump sum – as the UK rentals market is soaring and this will bring in a solid regular income. If you play an instrument or speak a language then you could offer your skills as a tutor and if you want to keep fit and have a love of the great outdoors, dog walking is a great way to earn some extra cash. You could also consider renting out a spare room via a site such as AirBnB – these are short-term holiday rentals so you can charge more and don’t have to deal with ongoing tenants.

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