Published On: Sat, Sep 14th, 2019

Approaching retirement but not state pension age? Pensions expert on what to do | Personal Finance | Finance


From enjoying their later years to health reasons, there’s a number of reasons why a person may stop working. For others, the need to care for a loved one may mean retiring from their former job. Pensioners may support themselves financially during this time with a private pension or savings, and some may also rely on the state pension as a form of income. But, some retirees may be yet to reach state pension age, and therefore unable to claim the payment.

The state pension age previously stood at 60 for women and 65 for men, but it is rising.

State pension age parity was reached last November, with this being 65 for both men and women.

It’s now set to rise to 66 by October 2020, ahead of further increases.

With some wondering whether they can afford to retire without their state pension, Express.co.uk spoke to Certified Financial Planner and pensions expert Warren Shute.

The Chartered Wealth Manager shared his thoughts on the question of what a person should do if they’re approaching retirement and can’t get their state pension for a few more years, with their own provisions being “fairly modest”.

Mr Shute explained that there may be all sorts of reasons why one’s retirement provisions may be small, and there may only be one option for those looking to fund retirement later in their life.

“There’s not much you can do other than work longer,” the financial planner said of those facing a gap between their retirement and reaching state pension age.

“It’s not necessarily the panacea of what people want to hear.”

For Mr Shute, younger generations are in a good position, with the ability for them to be “more prepared and aware” about the need to ensure funding for their retirement

He said of those in and/or approaching retirement at present: “When these people were 25, actually, financial things was only the things discussed for the ultra wealthy.

“There was no financial education for people.

“But if you are approaching retirement and you don’t have enough provision at the moment, other than putting more money away yourself, the only other thing you can do is potentially defer and work into retirement.

“More and more people are doing that. I have clients who work into their 70s and do it through choice, because I think sometimes work gives us more than just money.

“It keeps us mentally and physically active. So there’s something to be said for trying to take work into later life.”

Mr Shute added: “But the facts sort of says that if you are [in the position of where it’s] two to four years before you’re going to get your state pension, and that state pension isn’t going to be enough, especially combined with your modest personal pension, then there’s not much else you can do, other than start putting more money away, consider downsizing your property – simplifying your life – and carry on working.

“I think downsizing is a good retirement strategy for most people, whether they are finding times financially difficult or not. We can still sell our main residence in the UK without tax – which is a great retirement planning strategy.”

Purchasing a less expensive property, or moving to a less expensive area, is another top tip from Mr Shute, for those fortunate enough to own their own property.

“It can be a scary time, can’t it, approaching retirement? I think we all underestimate the amount of money we need for retirement,” he added.

READ MORE: State pension forecast: How much can you get? How to get the full amount – new and basic



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Approaching retirement but not state pension age? Pensions expert on what to do | Personal Finance | Finance