How to look after what money we have when we finish our working life and move into retirement

Most people get money through work. When you retire and stop work, you are suddenly cut off from this source of funds. Instead, you will normally have at least a pension or some other social security benefit, perhaps some pension from your job, and possibly some income from investments. Even if you have never managed to save much, retirement age is the time when many people find they have redundancy payments or a lump sum from an insurance or pension policy.

How will you manage? What pension will you get? Will you be able to do some work? Will you have to pay tax? Where should your money be invested? How can you provide for your family? Where can you go for help?

Should you make a will? Will your heirs have to pay tax when you die? These questions trouble most people when they think of retirement. However, as in the case of most financial questions, with a little information and some planning you can work out the answers.

This website will take some of the mystery out of these questions and provide answers to many of them.

Retirement and Budgeting

There are three main sources of income for retired people - the state retirement pension, the pension from your job, and income from savings or from any capital you may get through redundancy or an insurance policy. How rich you feel - and how poor! - will depend on your share of these three things. It will also depend on how you manage your spending. This section of the site looks at budgeting.

Managing Your Money

When you retire, your income will almost certainly go down, but so will many of your expenses. There will be no fares to work, no lunches or after work drinks, no leaving presents to buy, and you will not have to dress the part. But these savings are not normally going to be enough to absorb all the loss of income.

Some things, like heating, groceries, travel and hobbies will cost you more. The impact of retirement will also depend on what perks you got at work. If you had a company car, free use of the firm's telephone and never had to buy a pen or notepad, you may find that life is suddenly very expensive. However, once you reach pension age you will get some concessions on the cost of travel and entertainment.

Because the changes are so many and pull in different directions, it is essential to write down the main things you spend your money on, how much they cost you now and what you think they will cost in retirement. Then you can see how much you can save - and afford - when you retire.

Retirement Budgeting - read on

Retirement and Budgeting - Expenses and reducing your overheads

Your Home
Rates If your income is low after retirement, you may be able to get help with your rates through housing benefit.
Water and Sewerage Charges There are no concessions on grounds of age or income.
Rent or Mortgage If you pay rent and your income is low after retirement, you may be able to get help with your rent through housing benefit. If you still have a mortgage, you can only look forward to the day when it is paid off. Alternatively you could think of selling your home and buying somewhere cheaper or taking out a home income plan .
Electricity, Gas, Heating Costs You will probably use more electricity and gas when you retire because you will spend more time at home. If, before your . . . ... see: Retirement and Budgeting - Expenses and reducing your overheads