We all want to live comfortably during retirement, yet the type of lifestyle you’ll experience is determined by the decisions you make early on in life.

To ensure a relaxing and somewhat care-free retirement, here’s what you need to consider in order to bridge any gaps between what you want, have and will need.

Can I afford to retire?

Following the Government’s decision to scrap the default retirement age, employees can now legally work past their retirement age. You therefore need to consider whether you’ll bow out of employment as soon as possible or continue working, perhaps by reducing the number of hours, meaning you’ll still have a regular salary coming in.

The state pension currently stands at £115.95 a week, rising to £155.65 on 6 April 2016. The new rate is eligible to males born on or after 6 April 1951 and females on or after 6 April 1953. The new state pension will also take into account your National Insurance record and need 10 qualifying years to become eligible.

What do I need to consider?

Millions of people across the UK have now been automatically enrolled into a workplace pension scheme, but is it enough to support the retirement you desire? For most, sole reliance on the state pension and work pension will result in a drop in monthly income.

Other factors, such as a mortgage, car or household bills, can quickly eat into your regular income, which is where the importance of savings and investments come into play.

Effective retirement planning

It’s worth bearing in mind that retirement planning differs on how close you are to ceasing employment. Someone in their 50s, for example, should be considering ways to minimise risk in their current lifestyle, whilst those in their 20s may simply be trying to remain debt free.

Regardless of what stage you are in your working life, the following factors can improve your financial position during retirement.

Minimising debt

The impact of any debt can have a big effect during retirement, which is when your income is most likely to decrease. Getting to grips with how much you actually owe is the first step as well as interest rates, which can be just as important as the amount owed. Freeing you of any debt eliminates some of the pressure during retirement planning.

Increase your pension contributions

The annual pension allowance currently stands at £40,000, meaning you can pay this much extra into your work or private pension without incurring any tax. You can also top up your allowance with any unused funds from the last three years.

However, high earners will soon see their annual allowance restricted under new rules.

As of 6 April 2016 those earning £150,000 or more a year will see their annual allowance reduce by £1 for every £2 of excess income. The maximum reduction is £30,000, which results in an annual allowance of just £10,000.

To discuss your retirement goals and find out more about the pension options available, then contact our experts today on 0161 702 3500 or email Ged.Cosgrove@championgroup.co.uk.