Retirement planning checklist: 5 steps to help you prepare

For many, retirement means finally being the CEO of your day, whether it’s doing things you love like travel and hobbies, or simply slowing down.

While there’s lots to look forward to, stopping work is a major life transition. And like all journeys, you’re more likely to reach your destination smoothly if you’ve got a solid plan.

Read our checklist to help you get retirement ready.

1. Get a clear picture of your current financial position

Pensions

Find out how much your pensions are currently worth. You can do this by:

• checking your online account or app

• digging out paper statements if they’re recent

• calling your providers

If you’ve worked for different employers over the years, you’re likely to have a number of workplace pensions. If you can’t find them all, try the government’s tool to find pension contact details.

And you can get a State Pension forecast to find out how much State Pension you’ll get and when.

Savings and investments

Check how much savings you have and what your investments are currently worth. If you’ve already earmarked some of this money, to pay for a new kitchen for example, don’t include it in your tally.

Debt

If you’ve got any debt, make sure you know how much you still owe and decide when you’ll pay it off. Remember to include any mortgage repayments.

2. Work out your likely expenses and compare them with your expected pension income

Before retiring, it’s important to know that your future income can support the lifestyle you want.

To work out your likely expenses in retirement, take a look at your bank statements over the last 12 months. They’ll give you a realistic idea of how much you typically spend on staples like food, bills and hobbies, as well as larger expenses, such as home improvements and holidays.

Once you’ve got a clear picture of your current expenses, think about how they’re likely to change once you’re retired. Some costs may go down, such as travel if you currently commute to work. You may have paid off your mortgage by then too.

Equally, some expenses may increase. Your heating bill may go up if you’re at home more. And you may want to take all those exotic holidays you’ve been dreaming of.

You can use our pension calculator to find out how much pension income you might receive.

You may find that you can retire with confidence or decide to continue working for a while to increase your pension pot.

3. Consider combining your pensions

Combining your pensions into one gives you a clearer view of your savings and you’ll have less admin.

If you combine your pensions with a lower-cost provider, you could also save on fees. We found that reducing your fees by 0.3% a year over 25 years could save you nearly £40,000 on a £150,000 pension pot¹.

But there can be disadvantages to consolidating your pensions. These include:

• paying an exit fee to transfer your funds to another provider

• losing any guarantees, like guaranteed income or protected tax-free cash

• missing out on employer contributions if you transfer a workplace pension you’re currently paying into

Speak to a financial adviser if you’re not sure if combining your pensions is right for you.

4. Decide how you’ll take your pension

There are several ways to take your pension money.

The main ways are:

• using flexible income drawdown

• taking individual lump sums

• buying an annuity

• a mix of the above

Flexible income drawdown

You can usually take up to 25% of your pension as a tax-free cash lump sum upfront (up to the £268,275 lifetime limit). You don’t need to take it all in one go. You can then decide how much income to withdraw from the remaining 75% and when. It will be taxed as income.

The rest of your pension stays invested, so it has the chance to grow. This means your income is not guaranteed. You also need to make sure your money will last for your lifetime. 

Learn more about flexible income drawdown

Individual lump sums (UFPLS)

This might suit you if you don’t want a regular income. You can take smaller lump sums over time or take out all your pension money in one go. 

Usually 25% will be tax-free (up to the £268,275 lifetime limit) and the other 75% will be taxed as income.

If you take your entire pension pot as a lump sum, or start to take lump sums from your pension pot, it will trigger the money purchase annual allowance (MPAA). This reduces the amount you can pay into pensions, and get tax relief, from £60,000 to £10,000 a year.

Learn more about individual lump sums

Annuities

An annuity offers certainty as it pays you a guaranteed income for a fixed period or the rest of your life.

It’s an insurance product that you buy with your pension or other money. You don’t have to use all your pension – you can leave the rest invested, giving it a chance to grow.

We don’t offer annuities, but we can transfer your pension to your new provider.

Learn more about taking your pension money

5. Check where your money is invested and whether it still suits your risk profile

As you approach retirement, it’s important to make sure your investments still match how much risk you want to take.

You need to take a certain amount of risk when growing your money in your younger years, as higher-risk investments can potentially offer higher returns. And you have time on your side for your investments to recover from any market downturns.

But when you’re closer to retirement, it’s time to think about protecting your pension pot from potential loses. So remember to check whether your investments strike the right balance between stability and growth.

Learn how to save for retirement in your 50s

With a clear plan in place, you can approach retirement with greater confidence and focus on enjoying the life you’ve worked towards.

¹ This hypothetical scenario assumes a 5.5% annual return and that you don’t make any further pension contributions. It’s for illustrative purposes only and doesn’t represent a particular investment. Source: Vanguard calculations.
 

Investment risk information

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

Any projections should be regarded as hypothetical in nature and do not reflect or guarantee future results.

Eligibility to invest in a Vanguard Personal Pension depends on your individual circumstances. Please be aware that pension and tax rules may change in the future and the value of investments can go down as well as up, so you might get back less than you invested. You cannot usually access your pension savings or make any withdrawals until the age of 55, rising to the age of 57 in 2028.

If you are not sure of the suitability or appropriateness of any investment, product or service you should consult an authorised financial adviser. Please note this may incur a charge.

Your transfer will be sent to us as cash or shares (Vanguard funds only). During the transfer period any cash will not be invested so you could miss out on any increase in the value of your investments should the market rise.

Any tax reliefs referred to are those available under current legislation, which may change, and their availability and value will depend on your individual circumstances. If you have questions relating to your specific tax situation, please contact your tax adviser.

Important information

Vanguard only gives information on products and services and does not give investment advice based on individual circumstances. If you have any questions related to your investment decision or the suitability or appropriateness for you of the product[s] described, please contact your financial adviser.

This is designed for use by, and is directed only at, persons resident in the UK.

The information contained herein is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information does not constitute legal, tax, or investment advice. You must not, therefore, rely on it when making any investment decisions.

Issued by Vanguard Asset Management Limited, which is authorised and regulated in the UK by the Financial Conduct Authority.

© 2026 Vanguard Asset Management Limited. All rights reserved.

5322716