Even as you relax in retirement, it's important to keep track of your finances
Your retired lifestyle
When you first retire, you might decide to treat yourself to a few well-deserved luxuries, or take up a hobby to make the most of your new free time.
Culture, travel, training and education are all popular choices, but they all require financial planning, especially if you need to pay for things like course fees, admission to events, or special equipment.
To have the flexibility and freedom to really enjoy your retirement and maintain a good standard of living, you'll need to keep a shrewd eye on your finances.
Making the most of your money
During retirement, you can put your money to work by saving and investing to improve your lifestyle, just as you would with income from employment.
You can also make your money go further by finding ways to save on what you spend.
Once you enter retirement, savings on day-to-day expenses can be easier to make, with various discounts available to people of retirement age:
- The Senior Railcard is an annual card available to people aged 60 and over, which gives discounts of a 1/3 on certain types of railway ticket in Britain.
- You can get discounted foreign travel fares, including cruises, through many travel companies.
- You can get discounts on various leisure activities such as theatre tickets.
- People over 60 can get free NHS sight tests and prescriptions.
You should also find out if you're entitled to any government benefits like Winter Fuel Payment, Pension Credit or Veterans' benefits.
You can find out about retirement benefits at GOV.UK.
Don't pay more tax than you need to. Review your finances and make sure your savings and investments are as tax-efficient as possible.
Tax-efficient finances
It is important that you make sure you're using all the tax breaks available to you and that you carefully check that HMRC has issued the correct code number:
- Take advantage of your ISA allowance, which allows you to contribute up to £11,520 for the 2013/14 tax year. You can either invest the full amount in a tax-efficient Stocks and Shares ISA, or save up to £5,760 in a tax-free cash ISA, which is free from income tax and capital gains tax, with the remainder in a Stocks and Shares ISA. It also helps if you know the personal allowances for the tax band that you’re in. The amount of income anyone can have without paying income tax is £9,440, the 40% threshold for higher earners is currently £32,010 with the 45% threshold at over £150,000. If your income is more than £100,000 you lose £1 of allowance for every £2 of income.
- People born before 6 April 1948 will see their personal allowance frozen at £10,500, or, for those born before 6 April 1938, £10,660. The freeze will last until this cap aligns with the personal allowance, which will increase gradually over time to take inflation into account. But unless your tax office knows your date of birth, you may not have had the new rate applied.
- To make sure you have the right tax code, you can fill in a P161 Pension Coding form. You can download the P161 from GOV.UK.
The value of investments (and any income received from them) can fall as well as rise and you may not get back what you invested. For some investments this can also happen as a result of exchange rate fluctuations as shares and funds may have an exposure to overseas markets. You should aim to invest for at least five years.
The value of tax treatment will depend on your individual circumstances and may be subject to change in the future.
Check if you qualify for advice
If you have £50,000 or more in savings and investments, you may be eligible for HSBC Premier Financial Advice. See the full eligibility criteria.
If you don't qualify for HSBC Premier Financial Advice or if you'd rather not pay for advice, see other ways we can help.
Eligibility requirements
HSBC Premier Financial Advice is available to UK residents who have £50,000 or more in Savings and Investments and who are at least 18 years old at the time of the initial consultation.
You'll also need to have an HSBC Current Account or Savings Account for us to be able to deduct your fee. We can accept payment from a first direct Current or Savings Account too.
To find out more:
- See our HSBC Premier Financial Advice pages or;
- Call us on 0800 328 1298 to book an initial no-obligation consultation with an adviser. Lines are open Monday to Friday 8am to 9pm and 9:30am to 7pm on Saturday. (Textphone: 18001 0800 028 0126).
If you don't qualify for HSBC Premier Financial Advice, or if you'd prefer not to pay for advice, see other ways we can help.
If you are not a UK resident, see our HSBC Expat service.
