{"id":333658,"date":"2025-08-10T17:16:32","date_gmt":"2025-08-10T17:16:32","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/333658\/"},"modified":"2025-08-10T17:16:32","modified_gmt":"2025-08-10T17:16:32","slug":"what-do-i-need-to-know-before-easing-into-retirement","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/333658\/","title":{"rendered":"What do I need to know before easing into retirement?"},"content":{"rendered":"

After 35 years in the pharma industry Eimear Scott decided she wanted to do something else with her life. \u201cThe pandemic was the catalyst for me, as it was for a lot of people,\u201d she says. \u201cI didn\u2019t want to give up work entirely, but I wanted to do something that involved less travel and less stress. I was working 50-hour weeks, which was unsustainable.\u201d <\/p>\n

Scott now works remotely in customer care. The pay isn\u2019t as good but it\u2019s more enjoyable and she gets to spend a lot more time with her family, which is what she wanted in the first place. She plans to retire completely within three years.<\/p>\n

\u201cOnce I decided to step back, the first thing I did was get some independent financial advice, which was a huge help,\u201d Scott says. \u201cI\u2019d worked for a number of different companies over the years, which meant I had a few different pension pots<\/a>. I took the tax-free lump sum out of one and combined the others. I also adjusted my investment strategy to maximise tax efficiency.\u201d<\/p>\n

She found the most difficult part of the process was trying to accurately predict her long-term financial needs. \u201cIt\u2019s hard to know how much is enough when it comes to pension pots and savings when looking ahead to slow or even full retirement,\u201d she says. \u201cPeople are living longer now and who knows how much things like health insurance will be in 10, 20 or 30 years\u2019 time?\u201d <\/p>\n

Who can do it?<\/p>\n

So, can anyone choose to cut back on their working hours and still have all they need for a financially secure retirement? <\/p>\n

\u201cUnfortunately not,\u201d Nick Charalambous of Alpha Wealth says. \u201cSome careers don\u2019t allow for reduced hours and not everyone has sufficient pension resources or savings to make it feasible. <\/p>\n

\u201cHowever, for those with flexibility, particularly individuals with multiple pensions from different employers, it can offer a balanced and rewarding transition into the next life stage.\u201d<\/p>\n

\"Senior<\/p>\n

Driving off into the sunset? The retirement years beckon<\/p>\n

Ralph Benson of Moneycube agrees. \u201cIt\u2019s not for everyone. For instance, some people might still be paying off big mortgages<\/a> or have health issues where they would be better off staying in jobs where their cover is being paid for by their employer,\u201d he says. <\/p>\n

\u201cThere\u2019s been a lot of noise about slow retirement in the press, particularly post-pandemic, but I\u2019m not sure it will ever be a mass movement as such. I think it\u2019s a case of those who are doing it being very vocal about it rather than anything else.\u201d <\/p>\n

Not always a choice<\/p>\n

Benson also believes that, while some people might aspire to slow retirement, others have been left with little choice but to embrace it. \u201cIt\u2019s a dream for some but a nightmare for others,\u201d he says. \u201cIt\u2019s quite industry-specific. For instance, areas such as sales, software development and other parts of the IT sector<\/a> have traditionally been viewed as \u2018a young person\u2019s game\u2019, which can be problematic for older workers. <\/p>\n

\u201cI also know of cases where people working full-time on a contract basis with one company are struggling to get their contracts renewed as they get closer to retirement age. They don\u2019t want to leave full-time employment but are being forced to.\u201d<\/p>\n

Charalambous has also seen this first-hand. \u201cWe have supported clients who felt under pressure to accept reduced hours,\u201d he says. \u201cIn this situation it\u2019s essential that people understand their rights and have a solid plan in place to ensure any change works for them in the long run.\u201d <\/p>\n

Things to consider<\/p>\n

Whether by design or not, there are a number of important financial considerations to address beforehand to make the transition into slow retirement as smooth and successful as possible. Chief among these are day-to-day budgeting, pension and tax. <\/p>\n

\u2022 Financial survival kit to help you face the future without fear<\/b><\/a><\/p>\n

\u201cThe first step is to understand your expected monthly income requirements, both now and into the future, and set your budget accordingly,\u201d Charalambous says. \u201cThis includes your fixed costs such as mortgage or rent, utilities, groceries, insurance and transport, as well as discretionary spending like holidays, hobbies and social events. <\/p>\n

\u201cMany people assume they will spend less in retirement, but that is often not the case. The early years of retirement tend to be the most active and often the most expensive. If you plan to travel, start a project or enjoy more leisure, your financial plan needs to reflect that. It requires a two-stage retirement budget \u2014 one for the active, semi-retired years and another for the more traditional retirement phase.\u201d <\/p>\n

Benson stresses the importance of careful planning as it can be difficult to reverse any financial implications once you do decide to step away from full-time employment. \u201cHow much you need in your savings and pension pot will be different for everyone, but the general rule of thumb is that \u2018more is more\u2019,\u201d he says. <\/p>\n

\u201cYou need to plan carefully to avoid any surprises and always build in a sizeable contingency in case things go wrong. Talk to your most pessimistic friend and work from there.\u201d<\/p>\n

\"RedPension<\/p>\n

Managing your pension pot is perhaps the single most important consideration. The basic options are to delay drawing your pension to allow for further growth, to draw part of it while earning a reduced income, or continue contributing and benefit from available tax relief. Each option has long-term implications \u2014 drawing early will reduce your future pot, but continuing contributions may yield less tax relief if your income is lower. <\/p>\n

You are entitled to take 25 per cent of your pension tax-free, with a ceiling of \u20ac200,000 across all pensions. However, taking a lump sum early means you reduce the amount available tax-free in future drawdowns. This can affect future decisions, particularly if you have multiple pensions. <\/p>\n

If you have one pension, the perceived wisdom is to leave it untouched for as long as possible to maximise growth. \u201cIf you do decide to access it, it should only be for the purposes of investment, never for consumption,\u201d Benson says.<\/p>\n

However, if you are fortunate enough to have more than one pension pot, it may make sense to access an older one early to help bridge the gap between phased and full retirement. <\/p>\n

\u2022 Get your ducks in a row by consolidating little pension pots<\/b><\/a><\/p>\n

\u201cAccess to your pension depends on the type of scheme you have,\u201d Charalambous explains. \u201cFor example, if you have an old occupational pension and are no longer employed by the sponsoring company, you may be able to begin drawing from it from age 50. PRSAs [personal retirement savings accounts] and personal pensions are usually accessible from age 60, even if you continue to work elsewhere.\u201d <\/p>\n

\"WomanTax<\/p>\n

After spending most of your adult life working, the last thing you want to do is hand it all to the taxman just when your income might be about to dip. With this in mind, it\u2019s important to offset any potential tax traps by aligning your pension drawdown strategy with other income sources to minimise liabilities.<\/p>\n

\u201cCombining part-time work with pension income can often lead to an unexpected increase in your overall tax bill as you may be pushed into a higher tax bracket,\u201d Charalambous says. \u201cIt is important to assess your total income and tax position beforehand as even modest withdrawals can affect your eligibility for certain tax credits or reliefs.\u201d <\/p>\n

Build a bridge<\/p>\n

The concept of slow retirement promises a smorgasbord of health and lifestyle benefits but requires careful planning to ensure that you have enough income to last until your main pension benefits kick in. \u201cThink of it as building a bridge to get you through the part-time work years from roughly 55 to 70 without impacting your long-term financial security,\u201d Benson says. \u201cIt means a combination of long and short-term investments with certain funds ring-fenced until full retirement. <\/p>\n

\u201cIt can be done but, like everything else in life, there will be compromises. You have to consider, what would I be prepared to sacrifice?\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"After 35 years in the pharma industry Eimear Scott decided she wanted to do something else with her…\n","protected":false},"author":2,"featured_media":333659,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2499,16,15],"class_list":{"0":"post-333658","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115005606187270058","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/333658","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=333658"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/333658\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/333659"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=333658"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=333658"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=333658"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}