Starting to plan your retirement

Starting to plan your retirement presentation transcript

To be used in conjunction with the 'Starting to plan your retirement' presentation D100737 02/24 DC002625.

Slide 1. Making the most of your pension

Welcome and introductions

Housekeeping (including management of questions).

This session has been designed to help members, who are more than 10 years away from retirement, to start thinking about what they need to do in terms of planning for retirement. 

Remember, the savings in your workplace pension could become an important part of your income once you’re ready to slow down or stop working altogether.  

So, although this might seem like it’s still some way off, the decisions you make today are likely to play a vital role in shaping your future lifestyle.

Please note that we’re unable to answer any individual questions today.

To assist you, we’ve created a webpage that provides answers to some of the questions you may have about your workplace pension and includes links to the websites and tools that we’ll be looking at in today’s session, which you’ll find at legalandgeneral.com/pensionquestions

If you have a question about your individual plan, please contact our Helpline on 0345 070 8686.

Please note that we will be running a similar retirement planning webinar, called ‘Approaching your retirement’, for members who are much closer to their intended retirement date.

Slide 2. Important information

Risk warnings:

• This is a general education presentation and does not represent financial advice
• It’s based on the 2024/2025 tax year
• The law, tax rates and any allowances may change in the future
• The value of your investment will go up and down. It isn’t guaranteed, so you may get back less than you put in.

Over the last few years, we've seen uncertainty in financial markets caused by the COVID-19 pandemic, invasion of Ukraine and the rising costs of goods and services. This has led to volatile market conditions. However, history shows that markets do recover from all sorts of circumstances. It’s important to not make rash financial decisions in the heat of the moment about long-term investments.

Slide 3. Agenda: What are we going to cover today?

Today we’ll be focusing on:

• how to start planning for retirement if you haven’t already begun
• the different ways you can take your retirement savings and the importance of making sure the way your savings are invested matches your plans
• how to keep on top of your different pensions and what to do if you want to consolidate them into one place
• the resources that can help with your planning
• where to go to get more guidance and advice
• 3 things you can do straightaway to start planning your retirement.

Slide 4. Starting to plan your retirement

Getting started with planning for retirement can be tricky. Often, one of the most difficult aspects is knowing where to start.

So, if you’re new to retirement planning, then the things you need to start thinking about and/or doing next will be determined, mostly, by how far away you are from retirement.

Slide 5.  Getting started

If you haven’t done so already, it can really help to start thinking about what you want your retirement to look like.

You can start by thinking about some of the questions shown on the slide, such as:

• When and how will I start to wind down?
• What will I want to do with my time?
• What obligations or responsibilities will I still have?
• Where will I live?

And once you have a clearer idea of your answers to these sorts of questions, you can then start to think about how much income you might need and think about whether it’s realistic.

For more help with this, go to the Go&Save section of our financial wellbeing hub, which you can access by scanning the QR code on the slide.

Slide 6. Are your retirement plans on track?

Let’s look at this in a bit more detail.

It’s important to be aware that your gender and ethnicity can make it even harder to achieve your retirement goals.

Recent research carried out by Legal & General has identified that, if you’re of ethnic origin and/or a woman, your pension pot at retirement could end up being around half the amount of your white British or male counterparts.

This is largely due to the fact that women and employees from an ethnic background are more likely to be paid less and less likely to be in senior leadership positions (resulting in lower pay and lower pension contributions), more likely to take career breaks for childcare or as an unpaid carer and more likely to work part time or reduced hours.

However, you can take steps to avoid the gender and/or ethnicity pension gaps:

• try to contribute as much as you can into your pension - and start early
• make the most of your workplace pension
• try to maintain your contributions when taking time out to look after children or care for others
• review your savings at regular intervals to make sure you stay on track
• talk to your partner about your retirement savings, to ensure your retirement plans are in sync.

We know that in the early retirement years, your spending may increase as you have more time. Maybe you’ll want to participate in hobbies and interests that you didn’t previously have time for. If this could be you, you may want to consider slowing down and going part-time, to supplement your retirement income, rather than stopping work altogether.

Equally, there’ll also come a time when you may want to consider slowing down further – or stopping work completely – at which point your income needs may also change. With that in mind, now would probably be a good time to review your family finances.

Part of that will also include giving some thought to the way in which you plan to take your retirement savings and when. The accessing your retirement savings section on our ‘Go&Live’ website could be a good place to get started.

If you haven’t already, you might also want to start putting plans in place for your loved ones. Do you need to make a will - or review an existing one? Do you need to set up a Power of Attorney for yourself or other family members? Have you made the necessary arrangements associated with the transfer of any large assets (e.g. property).

You may also need to plan and budget for any long-term health and caring needs. If you’re needing to find care for a family member or partner, you may be able to use our Care Concierge service at no cost. If it’s available to your scheme, you’ll have access to a team of dedicated care experts, who are committed to helping you navigate the often challenging and difficult later life care journey.

Finding, and paying for, care is a deeply personal experience - everyone's needs are different.

The friendly and helpful Care Concierge team aim to understand your specific situation and requirements and will help you work out what your options are.

In short, you should probably start thinking about all aspects of your life in retirement, from your purpose in retirement and how you’ll spend your time (including the things on your bucket list) through to the assets you have and paying off any debts. 

Remember, being prepared can help to reduce the emotional and financial stress on both yourself and those around you, at whatever stage you’re at in your working life.

Slide 7. Let’s talk about Rewirement!

The transition to retirement can be a difficult one to navigate.

Our Rewirement podcasts - featuring broadcaster Angellica Bell along with a host of guests including real-life pension scheme members - offer information and support on a wide range of retirement-related issues from retirement planning to looking after your mental wellbeing.

You can access the Rewirement podcasts by scanning the QR code on the slide.

Slide 8. How much income will you need in retirement?

The Pensions and Lifetime Association (PLSA) have created the Retirement Living Standards to help pension savers visualise how much they might need to support a ‘minimum’, ‘moderate’ or ‘comfortable’ lifestyle in retirement.

To help with this, we’ve developed a Retirement living standards tool that can help you to work out how much you might need in retirement, either as an individual or as a couple.

It works with the PLSA’s Retirement Living Standards and allows you to amend different categories of expenditure so that it’s relevant to your needs, helping you to identify an annual income that would provide you with the lifestyle you’re aiming for.

You’ll find the Retirement living standards tool in your online account, which you can access in Manage Your Account or by scanning the QR code on the slide.

Please note that the figures shown on the slide are based on a single person living outside of London.

Slide 9. How do you plan to take your savings?

We’re going to take a little time to look at what you ought to start thinking about, when it comes to the way in which you might take your savings.

Knowing how you intend to take your money can help you to choose investments that not only reflect your intentions but also the level of investment risk that you’re willing to accept.

With this in mind we’re going to explore both of these aspects in more detail over the next few slides.

Slide 10. Your options at retirement

There are different options when it comes to taking money from your pension pot. You can:

• take a flexible income (often referred to as flexi access drawdown)
• use it to buy a lifetime annuity
• take it as cash - either all in one go or as a series of smaller amounts
• use a combination of all these options.

Please note, some members might not have access to all these options from the scheme they are currently in. To find out what’s available to members of your scheme, please check with your employer.

It’s important to consider how each of these options might match your personal circumstances and your goals in retirement.

To bring these options to life a little more, we’re just going to play you a short video.

<Play ‘Retirement options explained’ video at Legal & General - Learn about accessing your pension pot (legalandgeneral.com)>

Slide 11. Do your investments match your plans?

As we’ve just seen, you can use income drawdown to provide flexible income, use your pension pot to buy an annuity, take your money as cash, or combine two or more of these options. 

If this is something you haven’t really thought about, then you might want to start by asking yourself the following three questions …

1. Are your savings invested in a way that matches how you plan to take your money?
2. Are there other investment options that may be better suited to the way you’re planning to take your money?
3. If your current investments target a particular date, does this match when you plan to take your money?

If you haven’t already, you might want to look at the investment guides and factsheets, which are available on your scheme website or by visiting Manage Your Account, and could support your understanding.

You can access Manage Your Account by scanning the QR code.

Slide 12. Understanding risk and reward

When it comes to investing your money, there’s a relationship between investment performance and investment risk.

This means that, if you chose a high-risk fund that might have the potential to perform better than other investments, there’s likely to be a greater chance that you could lose a large part – and in some cases all – of the money you have invested. By investing in a low-risk fund, you’re unlikely to lose your savings but they’re unlikely to go up in value by as much.

You can reduce risk by putting your money in different types of investment with varying levels of risk. This is commonly referred to as 'diversification'.

It’s important to be aware that, in periods of extreme market shock, some asset classes can be more volatile and, as a result, the chance of you losing some or all of your money could be greater.

When you put your money into your pension, it’s invested into one or more funds with the aim of helping your savings grow. Funds can be made up of a range of assets - assets can commonly include equities (company shares), property, bonds (loans to businesses and government), cash (short-term deposits with governments and financial institutions such as banks and building societies).

In most cases, your scheme’s default investment option will automatically diversify the way your savings are invested.

For more information on this, or to find out more about risk and reward and how Legal & General risk rates its funds, see your scheme website.

Slide 13.  How are your savings invested?

The default investment option for your scheme will have been selected by your employer and/or your scheme Trustees, possibly in conjunction with their investment advisers.

Not all schemes have the same default investment option.

Depending on the scheme you are in, this will be a fund or lifestyle profile, and it is where your retirement savings will be automatically invested if you don’t make a different choice.

Although it’s considered a suitable choice for most scheme members, the default investment option doesn’t take into account your own personal circumstances or your future plans. You don’t have to remain in the default and, instead, you can choose to self-select your own investments from the options available to you (which may vary from one scheme to another).

And, although this may not necessarily be important to you at this stage in your pension journey it is worth being aware that some of the choices available may also allow you to invest in a way that suits your plans in retirement.

It’s important, therefore, to also be aware of where your savings are currently invested and to regularly to check that this reflects your current plans for retirement.

If you haven’t done so recently, now would be a good time to check this.

This would also be a good time to think about checking your selected retirement date, which - unless you’ve changed it yourself - would have been set automatically when you joined the scheme.

It’s important to review this date on an annual basis, or if your circumstances change, and think about whether you still intend - or can afford - to take your money at the date that’s been set.

If your selected retirement date no longer reflects your circumstances or your plans, you may want to consider changing it. This is particularly relevant if you’re invested in a lifestyle profile or a Target Date Fund that moves your savings into different funds or asset classes, as you get closer to your selected retirement date.

You can do this in Manage Your Account.

If you’re thinking of making your own investment decisions, you can find details of all the investment options that are available to you on your scheme website and/or by visiting your online account in Manage Your Account, where you will also be able to make any changes. It’s also important to check whether the fund or lifestyle profile you’re considering matches your own attitude to investment risk and your plans in retirement and that you are comfortable with the charges.

Please be aware that the value of an investment and any income taken from it is not guaranteed and can go down as well as up, and you may not get back the amount you originally invested. Different funds have different associated risks. Please read the relevant fund documentation before making any investment decisions.

And, as we mentioned on the previous slide, you may want to take financial advice before making any changes to your investments. You can find a local financial adviser at www.unbiased.co.uk, which you can access by scanning the QR code on the slide. Financial advisers usually charge for their service.

Slide 14. Getting your pensions into one place

If you've got Defined Contribution pension pots with previous employers, you can normally transfer them all into one plan.

Keeping your pension savings in one place could make them easier to manage, cost you less and give you greater choice, but it might not be right for everyone.

Slide 15. Finding lost pensions

There are billions of pounds worth of unclaimed retirement savings because people moved house and didn’t inform their previous provider! Could some of that be yours to claim? If so, this would no doubt be a very welcome addition to your pension pot and would provide additional clarity when it comes to planning your retirement.

So, if you do nothing else, it’s a good idea to let any previous pension providers know if you have – or are about to – change address. Doing this will enable them to continue communicating with you and will provide you with the advantage of knowing where those pension savings are when you’re ready to retire or want to transfer them.

If you don’t know where your pensions are, you can find lost pensions through the government’s pension tracing service at gov.uk/find-pension-contact-details. You can also use your mobile phone to scan the QR code and that will also take you to the same webpage.

You can find contact details for your own workplace or personal pension scheme or someone else’s scheme if you have their permission.

Please note that the government service won’t tell you whether you have a pension, or what its value is.

You also need the name of an employer or a pension provider to use the service.

Slide 16. Consolidating your pensions

There are lots of reasons why you might want to transfer an old pension to a different provider. You may want to make it easier to manage your retirement savings (by having them all in one place) but it could also be about reducing your charges or improving your investment choices or the options that are available when you want to take your money.  

When it comes to deciding whether transferring your retirement savings is right for you, there’s a lot to think about. You might want to start by comparing the charges and available options, to see whether a transfer would be beneficial. You should also check if there are any penalties for transferring out or whether you would lose any guarantees or special features.  

It’s important to be aware of pension scams. You can find out how to spot, avoid and report pension scams at the MoneyHelper website.

You should also find out if you’re required to seek financial advice, as some schemes (depending on the value of your pot) may require you get a recommendation from a financial adviser. And, even if you aren’t required to do so, you may still want to seek financial advice. To find an adviser in your local area go to unbiased.co.uk, which you can access by scanning the QR code on the slide. Advisers normally charge for their services.

Please note, as we outlined at the outset, we’re only providing information in our presentation today. We aren’t able to provide financial advice and, as such, we aren’t recommending that a transfer is the right thing for you.  

Slide 17. My Future Now

My Future Now is a pension transfer service that you can access, if it’s available to your scheme, through your online account in Manage Your Account. It’s a simple way to combine all your pension pots in one place.

Here’s our step-by-step guide to transferring other pensions to Legal & General using My Future Now:

1. Read our guide to pension transfers, to consider whether it’s right for you, before making a decision to transfer

You might want to make it easier to manage your retirement savings (by having them all in one place), reduce your charges or improve your investment choices and the options that are available when you want to take your money.  But it’s also important to ensure that there aren’t any penalties for transferring out or that you wouldn’t lose any guarantees or special features.

2. Check that we can accept your transfer

You’ll need to check the type of pension that you want to transfer, as there are some types of pensions that we can’t accept and others where you’ll be required to take financial advice.

3. Go to Manage Your Account, register for My Future Now and submit your request

You’ll need your National Insurance number, the name of the pension provider and the policy number, if you have it.

Assuming we can accept the transfer, we’ll provide you with a summary checklist and ask you to sign a declaration that authorises Legal & General to make the transfer on your behalf.

4. If you provide the name of your pension provider and policy number

My Future Now will proceed with your transfer request.

5. If you only provide the name of your pension provider

My Future Now will trace your pension.  Once it’s been found, you’ll be notified and will then have 5 working days to opt out before it’s transferred automatically.

Follow the ‘Transfer in a pension’ link in Manage Your Account, to access My Future Now, where you’ll find more information about this free service, including the guide to pension transfers.

Slide 18. Resources that can help

We want to help you take control of your money and give you the confidence to start planning your retirement.

To help you with this, we provide a range of useful tools and resources.

Slide 19.  Managing your pension

You can manage your retirement savings with Legal & General using your online account at Manage Your Account.

It’s a bit like ‘internet banking’ for your pension. In the same way most of us manage our bank accounts online these days, Manage Your Account gives you online access to manage your pension savings.

You can access Manage your Account at legalandgeneral.com/mya

Some of you may also be able to access it from your company’s intranet site or workplace benefits platform - without needing to enter a password if your employer operates a Single Sign On process.

You can also login to - or register to access - Manage Your Account by scanning the QR code on the slide.

Once logged in to your account, you’ll be able to:

• see the current value of your pension pot and contributions received from you and your employer
• use our planning tools to regularly check what your pension pot might be worth at retirement and to work out if you might want to increase your contributions or change your retirement date
• provide details of who you’d like your pension benefits to go to in the event of your death (nomination of beneficiary)
• manage how your savings are invested, including viewing your current fund performance and other investment choices available to you and changing the way your savings are invested if needed
• view your benefit statements and other important documents
• change your selected retirement date if it no longer reflects your plans.

Slide 20. Our retirement planning tool

Our retirement planning tool can help you to see if your retirement savings are on track. 

You can access this tool from your scheme microsite or by going to your online account in Manage Your Account.

However, if you access it via your online account, the tool will do some of the work for you by automatically populating some of the fields, including the value of your savings, the amount you contribute, and where your savings are invested.

Our retirement planning tool will help you have the retirement you want.

In four simple steps, you'll find out:

• The projected value of your pension pot.
• How much income you could get every year of your retirement.
• Whether this meets your retirement goals.
• What impact changing your contributions or retirement age will have on your income.

There are several risk warnings and assumptions and it’s important that you read and understand them. It’s also important to be aware that, using the tool does not replace the need for you to seek guidance and financial advice.

Slide 21. Midlife MOT

To help you with your retirement planning, we’ve created a free Open University course, which takes around 4 hours to complete.

The Midlife MOT is aimed at people in their 40s and 50s who want some help when it comes focusing on their own financial and physical wellbeing.

Completing this course will help you to assess your financial situation, understand how you can improve it and identify how much income you’ll need in retirement. It will also help you to look at your work life and assess your wellbeing.

Slide 22. Guidance and advice  

As you start planning for retirement, it’s important to get the support you need to help you make decisions about your retirement plans.

Slide 23. The importance of seeking guidance and advice

Money Helper is the government body that provides impartial financial guidance and support.

The MoneyHelper website has information about the costs and what you should expect if you decide to pay for financial advice. It’s a good place to start.

Pension Wise is a free and impartial service that can help you to understand the ways you can take your retirement savings and the potential tax implications of each one. Their website offers lots of information and, if you’re aged 50 or over, we’d advise you to book your free 60-minute appointment with a specialist who’ll provide you with guidance either face to face or over the phone.

The government also has a mid-life MOT website that provides guidance to help people carry out a financial stock-take some years before their retirement.

If you need personalised financial advice, visit unbiased.co.uk to find financial adviser in your local area. Please note that advisers normally charge for their services.

You can access these websites by scanning the QR codes on the screen.

Slide 24. LGFA: Legal & General Financial Advice  

Through your scheme you may have access to Legal & General Financial Advice (LGFA).

Deciding what to do with your pension savings can be complex. But you don’t have to decide on your own. If you’re aged 55 or over, and living in the UK, our advisers can help you review what you have and need before giving you expert advice about how to make best use of your hard-earned pension savings, all in the comfort of your own home.

Our retirement and planning advice team is an independent service provided by Legal & General Financial Advice, as part of the Legal & General Group.

Our advisers will help you understand:

• what income you’ll need in retirement
• what you’ll have, and
• what your options are, including tax implications and allowances you can take advantage of.

To find out more about the service and related costs go to the Legal & General Financial Advice website, which you can access by scanning the QR code on the slide.

Slide 25. Frequently asked questions  

Although we aren’t able to answer your individual questions today, we’ve created a webpage that provides answers to some of the questions you may have about your workplace pension and includes links to the websites and tools that we’ve looked at today, which you’ll find at legalandgeneral.com/pensionquestions.

We’re going to look at a couple of typical questions that members often ask.

If we don’t cover something that you want to find out a bit more about, please check out our ‘pension questions’ webpage.

If you have a question about your individual plan, please contact our Helpline on 0345 070 8686.

What will happen to my pension in the event of my death?

Should you die before taking any benefits, the value of your pension pot will be paid to your beneficiaries. Please note that this is separate from any death in service cover that your employer may provide.

The decision as to who will receive any money, will be at the discretion of Legal & General or your scheme’s trustees, depending on the type of scheme you are in.

You should let us know who you would want your beneficiaries to be, and you can do this by completing the Nominate a beneficiary section in Manage Your Account. This isn’t something that will be done on your behalf, so it’s your responsibility to ensure you complete the form.

It’s also important to keep this information up to date if your personal circumstances change.

What will happen if I die after I have started taking my savings?

If you die after you’ve started taking your savings, what your beneficiaries might receive will depend on the way you chose to take your money.

Although it’s a subject that most of us might prefer not to think about, it’s important to understand how the way in which you choose to take your savings might impact your beneficiaries in the event of your death.

This is something you ought to consider, particularly as you start to get closer to making decisions about your own retirement plans.

What will happen if I move abroad?

Should you decide to live outside the UK, you can choose to transfer your savings to a Qualifying Recognised Overseas Pension Scheme (QROPS).

You can find out more about this type of scheme and the things you need to consider at gov.uk.

If you’re thinking of drawing a pension from the UK while living abroad, it’s important to be aware of the tax implications. You can find out more on the MoneyHelper website.

What will happen if I leave my employer?

Even if you no longer work for your current employer, you can leave your retirement savings in this scheme invested with Legal & General and, depending on the type of scheme you are in, may also be able to continue to paying in. Charges for administering your plan and managing your investments will still apply.

Alternatively, you can transfer your savings to your new employer’s pension scheme or to another scheme of your choice.

Once your employer has paid the final pension contribution into your plan, we’ll send you a pack that explains your options in more detail.

Slide 26. Summary

We’ve covered a lot of ground today.

You may have already identified some of the things that you need to do following this presentation but, if you’re wondering where to start, we’d suggest focusing on the following:

1. It’s important to start firming up your plans in retirement.

The retirement planning tool in Manage Your Account can help you to identify how much you might want and will help you to work out what you need to do if you aren’t on track.

2. If you haven’t already, give some thought to how you plan to take the savings from your pension pot and when.

Knowing how you plan to take your money will help you to work out if your savings are invested in a way that reflects your intentions. Make sure you update your selected retirement age in Manage Your Account, as this may also have an impact on the type of funds your savings are invested in.

3. Make sure you know where any of your old pensions are and think about whether it would be in your interest to transfer them to your Legal & General account.

Slide 27. Thank you.

Thank you for attending today’s presentation. We hope you found it useful.

If there’s anything you wanted to know about that we didn’t cover today, please take a look at our ‘pension questions’ website, where you’ll find answers to some of the questions we get asked most often in presentations such as this one.

Go to ‘legalandgeneral.com/pensionquestions’ or scan the QR code on the slide.

If you have a specific query about your individual workplace savings plan, you can contact our Helpline on 0345 070 8686 between the hours of 8.30am and 7pm Monday to Friday.

Please note that call charges will vary. We may record and monitor calls.

You will also find more information about your workplace pension by visiting your scheme website or by going to your online account, which you can also access by scanning the ‘Manage Your Account’ QR code.

We’d be keen to get your feedback on today’s presentation, so that we can continue to improve these sessions going forward.  If you’re happy to provide us with some comments, there a feedback form on the BrightTalk platform that is quick and easy to complete.

We hope to see you at one of our events in the future.

Bye for now.

<Ends>

Legal & General (Portfolio Management Services) Limited.
Registered in England and Wales No. 2457525. Registered office: One Coleman Street, London EC2R 5AA.

We are authorised and regulated by the Financial Conduct Authority.

Legal & General Assurance Society Limited

Registered in England and Wales No.166055. Registered office: One Coleman Street, London EC2R 5AA.

We are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Trust-Based Occupational Pension Schemes are regulated by The Pensions Regulator.

Administrator: Legal & General Assurance Society Limited. Registered in England and Wales No. 00166055. Registered office: One Coleman Street, London EC2R 5AA.

Legal & General Assurance Society are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. However, the administration of occupational pension schemes is not regulated by the FCA or PRA.