Approaching retirement hub
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The 5–10 years before you stop work are when most decisions get locked in: State Pension forecast, workplace pension consolidation, drawdown versus annuity, tax-free lump sum, and IHT planning. This hub points you at the guides and tools to make those decisions on solid ground.
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The ordered steps
1. Check your State Pension forecast
You normally need at least 10 qualifying National Insurance years for any new State Pension. The 35-year rule for the full amount applies if your NI record started after April 2016; earlier records use transitional rules, including any contracted-out history. Check your personal forecast. Check your State Pension forecast and NI record before paying voluntary contributions. A gap does not always reduce your pension, and filling it may not increase it. Check available NI credits first; use the official service or ask the Future Pension Centre which years would help.
2. Find and consolidate old pensions (where it makes sense)
Most people change jobs many times. The Pension Tracing Service on gov.uk is free and finds workplace and personal pensions linked to past employers. Once you know what you have, you can decide whether to consolidate — keeping any that carry valuable guarantees.
3. Decide between drawdown and annuity (or both)
Drawdown keeps your pension invested and lets you take what you want, when you want — flexible but exposed to market falls and longevity risk. An annuity converts a pension lump sum into a guaranteed income for life. Many people use a mix.
4. Know the lump sum limits
Since 6 April 2024 the Lump Sum Allowance caps total tax-free pension lump sums at £268,275 across your lifetime. The Lump Sum and Death Benefit Allowance is £1,073,100. Taking your 25% tax-free cash uses up part of this allowance.
5. Plan for IHT changes from April 2027
From 6 April 2027, most unused defined-contribution pension funds will fall within Inheritance Tax for the first time. This is a structural change — review who is named on death-benefit nominations and whether expression of wishes is up to date.
Background guides
Useful calculators
- CalculatorPension contribution & tax relief calculator
- CalculatorPension drawdown sustainability calculator
- CalculatorMidlife money MOT checklist (ages 45–60)
- CalculatorWhat type of pension do I have?
- CalculatorAnnuity income estimator
- CalculatorNational Insurance top-up calculator
- CalculatorInheritance Tax calculator (UK)