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Approaching retirement: the decade that decides your income
The ten years before retirement are when your pot is usually at its largest and a bad decision costs the most. They are also the years when you still have time to fix things.
The challenges
- Pensions scattered across old employers, often in default funds no one has checked for years.
- Not knowing whether your pot is on track for the income you want.
- A large fall just before retirement can delay your plans.
- Choosing between drawdown, an annuity or a mix, without a clear framework.
How a disciplined process helps
Find and check everything you own
Start with a full list: workplace pensions, personal pensions, SIPPs, ISAs and cash. For each one note the fund, the total charges and the performance over five and ten years against a sensible benchmark.
It is common to discover a forgotten pot or a default fund that has lagged badly. Our guide shows you how to check.
Decide your risk before the market decides it for you
Work out how big a fall you could live with in pounds, not percentages. If a 30% fall in your pot would push back your retirement, your mix of investments should reflect that now, not after the fall.
This is where a written process earns its keep. Rules for rebalancing and reducing risk are easier to follow when they are set in advance.
Plan the income, not just the pot
The number that matters is the income you can draw reliably. Map your State Pension date, any final-salary income and what your investments need to provide. Then compare options such as drawdown and annuities on that basis.
Our retirement articles walk through the data and the trade-offs.
Where to start
- Guide: Is my pension performing?A step-by-step way to check your pension against sensible benchmarks.
- Pension savings by ageWhat is typical at each age and what to aim for.
- Retiring on £250kThe data, the plan and what makes it work or fail.
- Free portfolio reviewSend your holdings for an educational review of what you own and what it costs.
Questions people ask
Should I reduce risk as I approach retirement?
Many people do, but the right level depends on how you plan to take income. If you will stay invested through drawdown, you may still need meaningful growth for decades. A plan for income comes first; the mix of investments follows from it.
Is it worth combining old pensions?
Combining can cut costs and make your money easier to manage, but check for exit fees, guaranteed annuity rates or other valuable benefits before moving anything.
How do I know if I am on track?
Compare the income your pots could support with the income you need, after the State Pension and any other guaranteed income. Our article on pension savings by age is a useful starting point.
Important: this page is education and information only. It is not financial advice or a personal recommendation, and it does not take your circumstances into account. The value of investments and pensions can fall as well as rise, and you may get back less than you put in. Past performance is not a reliable indicator of future results. If you are unsure what is right for you, speak to a regulated financial adviser.