How to make sure your pension lasts

Invest time now to work out how to get the best out of what you put away

- TRICIA PHILLIPS

HOW do you make your finances stretch to ensure you enjoy retirement but don’t run out of money?

Your starting point should always be working out your state pension age. Given the many changes over the years, don’t assume the age you are able to claim will be the same as your parents.

As an example, if you are 55 today, your state pension age will currently be when you turn 67. This is the same for both men and women.

But your state pension age is just one consideration.

You’ll hopefully also have saved into a company pension, or pensions, and which type you have will determine how flexible you can be.

If you are in the public sector, and for the lucky few in the private sector, you will have what’s called a defined benefit or final salary type pension.

Here your pension is worked out based on your length of time with your employer, and your salary.

The longer you’ve worked for a company, the bigger your pension.

When you decide to retire, the pension scheme will tell you how much your pension is worth, how much tax-free cash you can take, and the income you’ll be paid.

You’ll get a cash lump sum and a monthly income which will typically increase in line with inflation every year for the rest of your life.