Planning

Optimising your money in retirement

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Review your finances to make your money go further

Even if you've saved hard throughout your working life and have a decent pension, times are tough at the moment for retired people. Interest rates are low and costs such as petrol, food and utilities are soaring. But there are practical steps you can take to maximise your finances:

  • Review your financial situation
  • Supplement your income through part-time work
  • Consider downsizing your property
Check that you are investing and saving in a tax-efficient way.

Review your financial situation

You need to check that you are investing and saving in a tax-efficient way. The amount of tax you pay may change when you retire, so make sure you're not paying more than you need to. HM Revenue & Customs has launched the Taxback campaign to encourage pensioners to reclaim any 'lost' interest. You can also register for savings interest to be paid gross in future, if you are a non-taxpayer.

Supplement your income through part-time work

You could also think about supplementing your income with part-time work. Many retirees have years of active life ahead of them and increasing numbers are starting businesses or turning hobbies and skills into fruitful employment.

Consider downsizing your property

Downsizing to a smaller property may free up some capital and reduce some of your running costs, such as maintenance and utility bills.

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 benefits will depend on individual circumstances. Tax laws could change in the future.

 

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Everyone's circumstances are different and what applies to one person may not be right for someone else. The suggestions above are based on a general assumption of each planning event and they are not intended to provide advice or recommendation on your individual financial needs.

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