The total income you want in retirement can come in all shapes and sizes, so we have updated to allow for this
We now provide more flexibility around the shape of income you want in retirement.
What you want in retirement will differ from person to person and can come in all shapes and sizes. You have told us you want more flexibility. We have listened and have updated our Wants page to do this. Here is a list of our updates we have made and why we think each may help.
Increases until 75
You may well want your income to increase each year to try and keep pace with rising prices. Previously this was a yes or choice, i.e. do you want a flat shape or an increasing one?
However, lots of research shows that many retirees spend less each year after they reach 75 or so, even allowing for increasing prices. This seems fairly obvious, unless we are really lucky, all of us are going to get less mobile when we are older. We will probably go out less, do less activities, holiday less and so on.
To allow for this, we now have a simple option to stop any increases from age 75. OK, but what’s the benefit?
Well, for the same size pot, you can get a higher starting income if it doesn’t increase for as long as you live. With an income which stays flat after 75, the possible starting income is higher, but you still have increases up until 75 to try and keep up with rising prices when you are more active. It’s a great middle ground for many.
Also as the State Pension will increase each year anyway, this means if the total amount you want is flat in later years, you need to take less and less each year after 75 from your pension pots to give you what you want.
Initial years
Many people may like to spend more when they have just retired. They are enjoying their new found freedom and having fun. We have always had the option to add a bit more in the first five years, now we have made it more flexible.
You can now choose any number of years from one to ten. Then add some additional income for these years. Just judge how long you may want this for and add it on top.
Complete flexibility
If you want to get really detailed and consider what income you need year by year, or just want to add some more in any one or two later years, when you know you have a lot going on in your life, you can do this now as well.
Just select without increases on the chart. Then change any year to what you think you will need. We will then add any increases you wanted back in.
Today’s money
As we say, prices will rise over time, so you will be able to buy less in future with the same amount of money.
If you want to see what any future year’s income looks like in todays money, just click the today’s money slider on the chart to see this.
To do this, Log in and go to main journey, or if you haven’t signed up yet, start a new journey and you can see the new options in the Wants page.
