Starting the process of accessing your DC pension

[PaulSB]

As you may have gleaned from our outgoings, we certainly don't do that! 😂

I think it is the use of "comfortable" that confuses me. I understand it is all subjective, but to need £50k a year if your kids are all financially independent and you are mortgage free would surely mean you are spending a lot on luxuries. Fair enough for those that do, but that is far beyond a "comfortable" existence surely?

There is only one way to do this. Grab an online financial planner as the basis of your analysis and use this as a reminder of the information that's needed.

For 12 months record all, and I do mean ALL, your income and outgoings. It's the small stuff you don't think of, newspapers, ours is £420pa, milk delivery, £360, nearly £800 pa without a thought!!

The alternative is to work through 12 months of historic bank statements, credit cards etc but this isn't very accurate - who really knows if the spend at Tesco was only food? I did it this way and it was reasonably accurate but took a great deal of effort. You have time on your side, it will be easier and more accurate.

Once you have this information find a good financial adviser who has all the necessary forecasting tools and will be able to run any "what if" scenario simply by changing a few figures.

I've a friend who withdrew cash from the business on a weekly basis and paid all day to day living expenses in cash. Her financial planning for retirement was very difficult. No records of anything other than a weekly lump of cash!!!

 

[ClichéGuevara]

I am a good way from having to start thinking about accessing a pension, but I do plan for our financial future and have been more engaged with it as I approach middle age. One thing that confuses me is the numbers that get banded around on various financial websites in relation to how much you need for a "comfortable retirement".

I regularly see £40-55k per year banded about for a retired couple! Am I missing something? My wife and I have an annual expenditure including mortgage costs and holidays/luxuries which is nowhere near even £40k and without a mortgage (which should be achieved by retirement age) will be significantly less than that. Is someone just making these numbers up?

A few years prior to retirement, I worked out how much I needed to live on, and then set my bank accounts to do just that while I was still working, putting the remainder into higher interest accounts that I could access if I'd got it wrong or felt like fussing myself up. Once I was comfortable with the figures, I could put more into the pension pot and other investments, which gained me tax relief.

It's meant that now I have retired, I'm feeling financially better off than when I was working, mainly due to tax and NI benefits, and have a bigger nest egg in reserve as a consequence as well as a sense of comfort knowing I can manage on this income.

 

[Emanresu]

I am a good way from having to start thinking about accessing a pension, but I do plan for our financial future and have been more engaged with it as I approach middle age. One thing that confuses me is the numbers that get banded around on various financial websites in relation to how much you need for a "comfortable retirement".

I regularly see £40-55k per year banded about for a retired couple! Am I missing something? My wife and I have an annual expenditure including mortgage costs and holidays/luxuries which is nowhere near even £40k and without a mortgage (which should be achieved by retirement age) will be significantly less than that. Is someone just making these numbers up?

They say that when people retire they do 3 things: Exotic holidays, a fast sporty car, and a young squeeze. Perhaps you will be saving on 1 of the 3.

 

[DCLane]

@Emanresu - you can add a nice new bike to that list. Hopefully replacing the 'young squeeze' in my case or SWMBO will kill me.

 

[midlandsgrimpeur]

They have all the details here if you're really bored!

https://www.retirementlivingstandards.org.uk/details

I am! 😂

 

[midlandsgrimpeur]

@Emanresu - you can add a nice new bike to that list. Hopefully replacing the 'young squeeze' in my case or SWMBO will kill me.

I think a flashy bike is by far the more likely for me! 😂

 

[midlandsgrimpeur]

There is only one way to do this. Grab an online financial planner as the basis of your analysis and use this as a reminder of the information that's needed.

For 12 months record all, and I do mean ALL, your income and outgoings. It's the small stuff you don't think of, newspapers, ours is £420pa, milk delivery, £360, nearly £800 pa without a thought!!

The alternative is to work through 12 months of historic bank statements, credit cards etc but this isn't very accurate - who really knows if the spend at Tesco was only food? I did it this way and it was reasonably accurate but took a great deal of effort. You have time on your side, it will be easier and more accurate.

Once you have this information find a good financial adviser who has all the necessary forecasting tools and will be able to run any "what if" scenario simply by changing a few figures.

I've a friend who withdrew cash from the business on a weekly basis and paid all day to day living expenses in cash. Her financial planning for retirement was very difficult. No records of anything other than a weekly lump of cash!!!

Thanks for this, very good advice. My banking app handily tracks all monthly expenditure and divides everything into nice easy spending categories which will make everything far easier to track over the year.

 

[ebikeerwidnes]

I've this coming to me in the next 1-5 years and hope the Teacher's Pension process is fairly painless. The accompanying smaller pensions I'm not overly concerned about as they're not worth that much.

My experience with the Teacher's Pension was very helpful and painless

Just a note - when I rang I was 56 and it was being made clear that I should leave - for "reasons" (we had a new Head)

when I rang - just to check where I was etc - the lady on teh phone went through everything and then paused and said she needed to ask someone something
Which was worrying
But she came back and said that as i had been paid more several years ago and had taken a drop in salary to go part time if I retired with the next few months then I would get far more than I would if I stayed until the end of the year

Which was pretty well done - and VERY welcome

So - I would give them a ring well before you retire and check up on things - you often loose very little by retiring a few years early!!

 

[DCLane]

@ebikeerwidnes - thanks. Up until the end of this academic year I would be on a bit more of a pension, as I had a management role for a year, which would drop slightly for the future albeit lessened by continued pension contribitions. I'm hoping that there will be a voluntary severance offer from my university at some point in the next few years I can take the opportunity of. If not I'm planning to stay for a bit.

Having had meetings with a couple of advisors the numbers look OK at present as I've been in a senior academic role for over 15 years and probably won't change much given we don't get that much in terms of pay rises.

 

[Alex321]

As you may have gleaned from our outgoings, we certainly don't do that! 😂

I think it is the use of "comfortable" that confuses me. I understand it is all subjective, but to need £50k a year if your kids are all financially independent and you are mortgage free would surely mean you are spending a lot on luxuries. Fair enough for those that do, but that is far beyond a "comfortable" existence surely?

I completely agree. They seem to think that "comfortable" in retirement means you have a lot more than the median working income. WHich is just daft.

I consider we are very comfortably off right now - we can afford 2-3 fairly expensive foreign holidays per year without really worrying about ut, run 2 cars plus a camper van, can go out for a meal or to a concert whenever we want (which isn't often, but we could), etc.

And I'm not expecting our gross household income to change by more than about £1k per year when I retire fully at 70 (three years time), as I have been working part time (3 days a week) for the last year. But it isn't particulrly close to what those things say is needed to be "comfortable" in retirement.

 

[roubaixtuesday]

They seem to think that "comfortable" in retirement means you have a lot more than the median working income. WHich is just daft.

Not sure how you reach that conclusion?

Median weekly earnings for full-time employees were £766.60 in April 2025,

https://www.ons.gov.uk/employmentan...rveyofhoursandearnings/2025#employee-earnings

That's £40k pa, only just below the "comfortable" £43k for a single, and well above the £31k "moderate".

 

[ebikeerwidnes]

@ebikeerwidnes - thanks. Up until the end of this academic year I would be on a bit more of a pension, as I had a management role for a year, which would drop slightly for the future albeit lessened by continued pension contribitions. I'm hoping that there will be a voluntary severance offer from my university at some point in the next few years I can take the opportunity of. If not I'm planning to stay for a bit.

Having had meetings with a couple of advisors the numbers look OK at present as I've been in a senior academic role for over 15 years and probably won't change much given we don't get that much in terms of pay rises.

Sounds good

Remember the bits that say your pension is based on the highest salary over the past x year (5??)

That means that you have the option of going part-time or dropping back a bit for the last year or so and not loosing anything
assuming
a) I am right
and
b) it is still the same


but whatver - hope it goes well - retirement is a bit strange at first but is great when you get used to not bothering going to work!!!

 

[DCLane]

Sounds good

Remember the bits that say your pension is based on the highest salary over the past x year (5??)

That means that you have the option of going part-time or dropping back a bit for the last year or so and not loosing anything
assuming
a) I am right
and
b) it is still the same


but whatver - hope it goes well - retirement is a bit strange at first but is great when you get used to not bothering going to work!!!

That's pretty much correct. My intention is to work full time until I take the pension at some point between now and 60½, then work part-time for one or two days a week. I could drop it to and 80% / 60% contract if I wished a couple of years before, but that's not the intention unless I have to.

The 60½ is because if I retire at 60 it'd be just after the busiest point of the teaching period, when if it's at 60½ I'd then get the 6 months of year-end/summer plus student induction basically as a nice quiet slow-down.

Retirement budgeting plus planned retirement income is then done for 60-64 / 65-66 until state pension kicks in / 67+ with and without a state pension in case it becomes means-tested. It doesn't just involve pension income as I've got 'alternative pension' provision just in case it all goes pear-shaped.

I'm doing the planning now as I've seen family members in a pickle for not doing any.

 

[fossyant]

That's pretty much correct. My intention is to work full time until I take the pension at some point between now and 60½, then work part-time for one or two days a week. I could drop it to and 80% / 60% contract if I wished a couple of years before, but that's not the intention unless I have to.

The 60½ is because if I retire at 60 it'd be just after the busiest point of the teaching period, when if it's at 60½ I'd then get the 6 months of year-end/summer plus student induction basically as a nice quiet slow-down.

Retirement budgeting plus planned retirement income is then done for 60-64 / 65-66 until state pension kicks in / 67+ with and without a state pension in case it becomes means-tested. It doesn't just involve pension income as I've got 'alternative pension' provision just in case it all goes pear-shaped.

I'm doing the planning now as I've seen family members in a pickle for not doing any.

I'm looking at 60 or 62 - hold on till 62 and my main pension goes up by £5k pa from that over 60. Hold on till 67 and it's really good, but I'd struggle to spend it and add in state pensions. I'm not so sure part time in my role would work (professional services in a Uni), so I'd do something I enjoy, although shifting to a totally different role could work - tops the pension up. At least as an academic you can drop down hours and keep the bits you want, eg teaching.

I am seeing too many people get ill in mid 60's that's preventing much of an active retirement. Colleague who I work with has just been diagnosed with the big C and they are the same age. It's not a 'good one'. MIL didn't have much of a life after 65 till 79.

62 would be pretty good, or earlier if VS comes our way - I've said to colleagues 'if I start mis-behaving...' - got told "no you aren't going anywhere". I'll have to be really naughty.

 

[DCLane]

62 would be pretty good, or earlier if VS comes our way - I've said to colleagues 'if I start mis-behaving...' - got told "no you aren't going anywhere". I'll have to be really naughty.

Given my 'colleague' who stripped to his underwear in a lecture kept his job, I'm not sure what "really naughty" could be

Spoiler: don't watch the video if you're squeamish.

I'd like to do some other things once retired, so don't want to be waiting too late. Yes, I could probably pick up part-time teaching quite easily, but intend to try something different.