Important information - the value of investments and the income from them can go down as well as up, so you may get back less than you invest.
Where do you want to be 10 years from now? This question doesn’t just apply to career paths, it’s also worth asking in relation to your finances.
If your answer is ‘enjoying my retirement,’ and ‘quitting the nine-to-five grind’ now is the time to take a closer look at your savings and investments to ensure they are retirement-ready.
At this stage you have time on your side — a decade gives ample time to ensure there are solid foundations to your financial plans. But don’t be lulled into a false sense of security; 10 years can soon fly by! Failing to act now could mean working longer than planned or downsizing your retirement aspirations.
At this point, your focus should be on understanding your current position, creating a realistic plan and boosting savings levels. This checklist offers some useful pointers to help you build a robust retirement plan.
Get a State Pension forecast
The State Pension, currently worth around £221.20 a week1, is a key part of most people’s finances after retirement so you need to know exactly when this will be paid and what it will be worth.
The figure above is the full new flat-rate pension, but eligibility depends on your National Insurance contributions. The State Pension age is currently 66 but will begin to rise gradually to 67 from May 2026. This could affect the timings around stopping work and may mean you need to dip into savings or investments to cover any income gap.
Know how much you’re worth
Gather up-to-date statements for all your savings, investments, and pensions. Dig through old paperwork to ensure you haven’t lost track of older pension pots, particularly those linked to previous employers.
Alongside current valuations, check forecasts to see what these funds might be worth at your planned retirement date. Most pensions should include forward projections, but remember it is just this, a projection, and the exact fund size will depend on contributions made and underlying investment conditions. If you have a defined benefit pension (also known as a final salary pension) this should show the salary-linked income you’ll receive at your set retirement date, which may differ from your state pension age.
Know how much you’ll need
Even if it’s just an estimate, think about your potential spending requirements in retirement. Will you still have a mortgage, or can you reduce or pay this off within the next 10 years? Will other debts also be cleared?
The Pensions and Lifetime Savings Association’s Retirement Living Standards provide helpful guidelines for typical expenditure levels for a “moderate” or “comfortable” retirement. Tools like Fidelity’s Retirement Planning Calculators can help you create a more personalised plan and ensure you’re on track for the retirement you want.
Supercharge your savings
Starting your retirement plan now gives you time to plug potential gaps. The decade before retirement often coincides with peak earning years, providing an opportunity to supercharge your savings.
Maximise tax-free savings vehicles like ISAs and SIPPs but consider how you’ll use them in retirement. For higher-rate taxpayers, pensions offer generous tax relief on contributions, although income taken from pensions (except the 25% tax-free lump sum) is taxable. ISAs, on the other hand, allow tax-free withdrawals. A mix of both can provide flexibility and ensure long-term growth.
Don’t overlook workplace pension contributions
Tax relief applies to all pensions, including SIPPs and workplace schemes. Workplace pensions typically come with employer contributions, which can significantly boost their value. Many companies offer “matching” arrangements, increasing their contributions if employees contribute more than the minimum — so make the most of these opportunities where appropriate. You wouldn’t turn down a pay rise from your company, so why turn down additional pension contributions, which are effectively deferred pay.
Consolidate investments
Managing multiple smaller pots can be time-consuming and may not be cost-effective. Ten years before retirement can be an ideal time to consolidate holdings, to ensure you are not paying over the odds on charges and your money is in a suitable investment strategy.
However, before moving older pensions or investments, check that you’re not giving up valuable guarantees, such as enhanced annuity rates or guaranteed minimum pensions.
Review your investment strategy
With 10 years to go, it’s usually wise to keep most of your savings invested rather than holding them all in cash, which may not keep pace with inflation. However, equity investments can be volatile, so as you near retirement, you may want to consider gradually shifting some savings into lower-risk assets. Much will depend on individual circumstances though so consider seeking advice. Commit to regular reviews of your investments to ensure they reflect your circumstances and risk tolerance. A clear, balanced strategy will help safeguard your retirement savings while enabling them to grow.
Source:
1 Gov.uk, January 2025
Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
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