Pension challenges and how to overcome them

Lauren Morton | 01/04/2019


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Lots of people approaching retirement want to stop work on their own terms, whether that’s reducing the number of hours they work gradually, or finishing either before or after their official retirement age. We’ve already looked at how retirement is no longer black or white but here, we focus on some of the main challenges that people face when deciding when to stop work, and how to overcome them.

Challenge one: wanting to work for longer

Nearly eight out of 10 UK adults (78%) aged 30-59 believe that they will continue to work in some form after they have started to draw an income from a pension, according to Profile Pensions research.

More than a third of 30-39 year-olds currently believe that they will continue in paid full-time work after they have started to draw an income from a pension.

However, not all employers will allow employees to work beyond their retirement date, so it may be necessary to consider other ways to generate an income. Separate research by insurer Aegon found that 35% of workers feel that ageism will influence their decision on when to stop working.

If you’re worried about having to stop work earlier than you’d like, remember there are still plenty of ways you may be able to top up your retirement income. Check out our blog on ways to give your retirement income a boost to find inspiration.

Challenge two: over-estimating the value of the state pension

Nearly half (48%) of UK adults aged 30-59 are setting their sights on retiring before their State Retirement Age, according to our research, yet one in four over-estimate the value of the State Pension, potentially leaving them with less income than they were expecting in retirement. If you are planning on retiring before you get to state retirement age, it’s vital to think about how you’ll make ends meet during this period. You should also make sure you know exactly how much the state pension is likely to provide you with once you reach this age, as well as how much you’re likely to get from any workplace or personal pensions. Use our pension calculator to help you see whether you’re on track for a modest or comfortable retirement.

Challenge three: being forced to retire early due to ill health

Failing health was identified by seven million workers as the single biggest issue that will influence their decision on calling time on their working life, Aegon’s research found. This can have a serious impact on long-term financial security, as it means less time to save to cover retirement costs. However, remember that if you’re not able to work any longer due to ill health, you may be able to take your pension benefits early, even before the age of 55. If you’re not sure what your rights are, contact your pension provider to find out your options, or seek professional financial advice.

Challenge four: having caring responsibilities

Many people’s retirement plans are dictated by having caring responsibilities for a partner or parents. More than five million people identified this as a reason for having to stop work, according to Aegon’s research. If you do have to care for someone who’s ill, you may be able to claim National Insurance credits, which help build up your entitlement to the State Pension. You may also be entitled to a Carer’s Allowance, if the person you care for is receiving either Attendance Allowance or the care component of the Disability Living Allowance. Citizens Advice has lots more information on the benefits and financial support that may be available to you if you’re a carer.


Although it’s impossible for anyone to predict exactly what the future will hold, it’s important to make sure you’re prepared for the unexpected. That means trying to save as much as possible for the future, as well as working out how much you’re likely to need when you stop work. It’s also vital to ensure your existing pensions are working as hard as they possibly can for you, and that you’re not paying over the odds in charges. If you need help with your pensions, speak to a professional financial adviser who can talk you through the various options available to you.

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