Retirement Planning

Getting you
ready for
retirement

Thinking of retiring in the
next few years?

This guide is here to help you prepare

Hooray, it’s the final countdown to your retirement. A period when you
can really start to look forward to your new way of life – and think carefully
about how you wish to spend it.
Now could also be a crucial time to check over your financial plans.
For instance, are you on track? Can you afford to retire in the next few
years? Or is there more you could be doing to achieve the lifestyle you
deserve in retirement?
There’s a lot to think about right now – and everything you do until
the big day could make a notable difference to your future. That’s why
we’re here to support you as much as possible.

02

With you every step of the way

Through our retirement planning service, we’ll talk you through the things you
need to know and, help you work out what it is you really want from retirement.
We’ll also work with you to build a financial plan you can rely on.
Even once you’re retired, it’s still really important to keep on top of your
financial plans. With that in mind, our service could be available to you
now, as you step into retirement, and every single year after that.

Long-term planning is key

There are a lot of things that could impact on your income at any stage in
retirement – we talk about some of these on page 7. By having a long-term
plan, you’ll have more chance to prepare for them as much as possible – and
manage your money in a way that makes sure it lasts as long as you need it to.
Mapping out what you want from the future is just the first part of your
strategy. With our help, you could keep on top of your plans for the rest of
retirement – without having the pressure of doing it yourself.

03

Why the state pension
probably won’t be enough

A lot of people think that once they’re retired, they can rely solely on the
state pension for income. This often isn’t the case.

Because, although the state pension is a useful income boost in retirement, it
probably won’t be enough to financially support you. For instance, over 2022/23,
the full state pension is £185.15 every week – that’s only £9,627.80 a year.

Think about your wage now – as well as the income you’ll need to live on, enjoy
life, and feel financially comfortable. Chances are the state pension will be much
lower than your current income – in retirement, it will probably only cover the
basic costs. That’s why it’s really important to have other savings in place.

As this table shows, the earlier in life you save, the more manageable
it will be.

Target value From age From age From age
at 65 30 40 50

£100,000 £89 £168 £375

£250,000 £221 £420 £936

How we worked this out:

• We’ve assumed your underlying pension investment will grow by an average
of 5% a year. If your investments grow by a lower amount, you’d need to save
more to achieve your target. Please note this is an illustrative example only.

• We’ve also assumed you’ll retire at 65. Please note that the age you start
taking the pension could affect the benefits you receive.

• Contributions are before tax (ie gross). It is also based on a single life
pension and doesn’t factor in the rate of inflation.

The illustration provided isn’t representative of the performance of investments
you will have, and the amounts may be more or less than this.

04

The below Which? table shows how much income a couple might
need to achieve different types of lifestyle in retirement*.

Retirement type

State Pension Basic Comfortable Luxury

£9,627.80 Amount per year £45,000

per person £18,000 £28,000 New

What it will cover

Utilities and Utilities, European Long-haul trips
housing costs transport, holidays and and a new car
housing costs leisure activities every five years

*Which?, 2022.

We’ll help you explore ways your own savings, investments and
pensions may be able to boost your retirement income further.
This includes looking at tax allowances available to you –
using your money in a tax-efficient way could help you further
in making sure your money lasts.

05

What will you spend your
money on in retirement?

First up, there’s your regular day-to-day spending

You could find that a lot of your spending habits change in retirement.
For instance, more money might go on hobbies, eating out and utilities.
Whereas you may need less for petrol, public transport, and debts like your
mortgages (as most people pay these off before they retire).

Other regular costs, like your weekly food shop, clothes and phone bill will
probably stay the same (depending on inflation).

Then there are other, more expensive costs

It’s important to think about major spends you have in mind. For example,
special holidays (or holidaying more often), splashing out on a new car every
few years, a holiday home or starting a new hobby.

Finally, the biggest expenses – your goals

Retirement is the perfect opportunity to create a bucket list. After all, this is
a stage in life where you have much more time to learn new things, take up
hobbies you’ve always wanted to do, even find yourself. Perhaps you already
have a few ideas already?

Knowing how much you might spend in retirement can be easier said than
done. But don’t worry – this is something you can chat to us about. We could
help you develop a clearer idea of everything you may spend your money on –
and what you want your retirement to look like. For instance, we’ll look at the
standard of living you’d like, and the goals you want to achieve.

06

What might affect your
income in retirement?

There’s a lot that could eat into your income when you’re retired,
and it’s really important to factor these into your financial plans.

Here are just three obstacles to bear in mind:

Longevity

People are living longer nowadays – so there’s a good chance
your retirement could last a very long time. Much longer than
you might realise.
That’s why it’s not only essential to plan for the first few years
of retirement, but the decades that will hopefully follow.

Changing income needs

It’s important to remember that as you get older, your situation
and income needs may change. For instance, you may need
extra money for unexpected events deep into retirement –
such as short-term or long-term care costs.

Inflation

If you don’t have retirement savings in the right place, inflation
(the rising cost of living) could really hold you back – and
prevent your money from growing in real terms.
In other words, money you build over time could be worth less
in value in 10 years. Inflation has averaged 2.1% over the past
10 years*. If you had £20,000 in savings, it would need to grow
by 2.1% each year to £24,619 to retain its real value.

*As measured by the Consumer Price Index. August 2012-July 2022.

07

We can’t predict the future

But we could help you prepare for the unexpected. When helping you build
a tailored strategy, it’s so important to consider anything that may crop
up unexpectedly. We’ll consider things like inflation, longevity, and other
eventualities that could heavily impact on your retirement income.
So that we can do this as effectively as possible, we’ll use our cash flow
tool. An integral part of our retirement planning service, this will help us
to build a better picture of your financial situation, weigh up your options,
and help you better prepare for the unexpected.

Using our cash flow tool now and throughout retirement, we can check:
• If your income is likely to provide what you need in retirement
• If your income could last as long as you need it to
• What it could mean if something was to go wrong

Here to support you

Key areas we could help you with:
• Reviewing the performance of your overall savings, investments

and pensions
• Taking advantage of tax allowances
• Supporting your family
• Your legacy

We appreciate financial planning isn’t the easiest task. That’s why we’re
right here to support you every step of the way, and take the pressure away
from you. And help you feel more confident about this new and exciting
life stage.
The advice we provide doesn’t have to be a one-off. We offer an ongoing
retirement service, which means we could support you every single year
from now – right throughout retirement. Providing you’re happy to pay an
ongoing fee.

08

How our ongoing service
works in four simple steps

1. Around five years from retirement

R We’ll get to know you, understand what you want from your new,

retired life. And review your savings, investments and pensions.
This is the perfect time to check your plans are on track, and
start building your retirement strategy.
If you’re less than five years away, don’t worry. Although this
gives us less time to make use of any valuable pension
allowances, we can still look at ways to strengthen your plans
as much as possible.

2. Getting you ready for retirement,
the final countdown

During the final years of working, we’ll review how your pensions
and investments are invested to see if they’re still right for you –
or if any adjustments need to be made.

3. Moving into retirement, six months
before you stop working

So that you can step into retirement feeling confident, we’ll take
a look at your final plans to make sure you’re fully prepared.

4. Throughout retirement, every year
you’re retired

We’ll regularly review your income strategy to make sure it’s
still working for you. This includes checking whether anything
has impacted on your income needs, as well as the amount
you receive.
By doing this every year, you can feel reassured that you’re
keeping track of your financial plans and enjoy your retirement.

09

It’s all about you

We appreciate everyone’s unique. We’ll take the time to get to know
you – and provide recommendations that are right for you and your
personal needs.
To give you the right level of help, we offer a range of advice
services at different costs, tailored to you.

Our no pressure promise

Upon hearing our recommendations, we promise there’s
no pressure to take our advice. And we’ll give you the
time you need to decide what’s right for you.

It costs nothing to hear our recommendations

You’ll only have to pay a charge if you wish to go ahead with a
recommendation. Even then, we’ll talk through all costs in detail
before you make your decision.

10

Your next steps

Arrange your free phone
consultation with Skipton.

1 Speak to the person referring you today to book a telephone
appointment.

2 Skipton will then call for an initial chat to help you decide
if our advice could be an option for you.

3 If you’re happy to go ahead, Skipton will book you in for
a review either at your local branch or through a video link.

We offer pension financial advice to anyone with £20,000 or more to
invest, or at least £400 per month. Or have an existing pension(s) with
a minimum value of £50,000.

“I feel that my journey 4.8 out of 5
into retirement will be
much easier with Based on 3392 customer
Skipton advising me.” reviews as at 08/07/22
Tanya, London
44..65
Testimonial model used for illustrative purposes. RateRdate‘Ed x“Ecxeclellelenntt”’ 08/07/22

15th February 2022

We’re proud to be rated
excellent on Trustpilot
by our customers. 

A pension is a long term investment and your Capital is at Risk. Your fund
value can go down as well as up and you could get back less than you paid in.
The tax treatment of pensions is dependent on your personal circumstances and
prevailing legislation which may change in the future. Your eventual income will
depend upon factors such as the size of your fund at retirement, future interest
rates and tax legislation. With income drawdown, if you take too much income
too quickly, your fund could be depleted or run out altogether.

11

If you’d like this booklet in large print, braille or audio, please ask in branch
or call 0345 850 1700.

Skipton Building Society is a member of the Building Societies Association. Authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority,
under registration number 153706, for accepting deposits, advising on and arranging mortgages and providing
Restricted financial advice. Principal Office, The Bailey, Skipton, North Yorkshire BD23 1DN. 11-0997\0922