Planning for retirement in 6 steps
Whether you’re expecting to reduce your working hours as you get older or stop working altogether, you need to plan for your financial future. There’s lots to consider – and your NWPS benefits are only part of the picture.
This page gives you a pathway to follow to get you thinking, understand the factors you need to consider and signpost you to where to get further help, support and information. It isn’t exhaustive – because your circumstances are personal to you – but we hope it helps!
Once you retire – or start to reduce your working hours ahead of stopping work altogether – you need to think about what your household finances will be in the future. Things are likely to be different to how they are now.
A good starting point is to look at the Pensions UK Retirement Living Standards. These show what life in retirement could cost, based on three different levels of spending. They include examples of typical everyday costs and the kinds of things you might be able to afford at each level.
The Retirement Living Standards should help you start thinking about the type of life you want in the future. You need to look at both money going out and coming in – so let’s look at step 2: understanding what your income might be.
You may have many sources of income in the future or only a few. You need to estimate how much you might receive from each. They could be:
You can check what you might receive here: www.gov.uk/check-state-pension.
You’ll get a guaranteed income for life from NWPS. You’ll also have the option to take a one-off tax-free cash sum and a lower guaranteed income for life. (There are other options too – we look at this in more detail at step 5).
Your Northumbrian Water Lifesight pension (if you have one) LifeSight.
You’ll need to contact the administrator or provider of each pension scheme you’ve been a member of or paid into to ask for a retirement quotation.
This could include other savings and investments, work you might do in future, income from a property or room you rent out or if you plan to downsize your home, for example.
If you can’t find details for the other pension benefits you have, you can try to find contacts through the gov.uk website: www.gov.uk/find-pension-contact-details.
You can ask the NWPS administrator, Hymans Robertson, for a retirement quotation from age 55 – this will help you understand what you might receive from the Scheme. Do this by
or
It will typically take 3 weeks to receive your retirement quotation from the administration team.
The information you’ve collected through steps 1 and 2 will help you think in more depth to plan your future budget.
Remember your debts! If you have debts like a mortgage, loan or credit card balance, factor these into your planning. Ideally you want to pay these off before you retire or make sure you include them in your budget planning. MoneyHelper has some useful guidance on prioritising debt and using your pension to pay off debt.
There’s lots of free tools available to help you think about your income and outgoings – here’s one from MoneyHelper: Budget planner | Free online budget planning tool
If it looks like the money you expect to come in (your income) won’t meet the money you expect to spend or need to achieve the lifestyle you’re aiming for (your outgoings) you’ll need to look at ways to fill the gap.
This could include:
MoneyHelper has a handy guide for ways to boost your pension: Ways to boost your pension | MoneyHelper
Taking these steps helps you see when and how you choose to take your pension can affect how comfortable your retirement is. There’ll be choices and options to make for every pension scheme you’re a member of.
For example, from NWPS you’ll get a guaranteed regular income for life once you retire. But you can also choose to take a tax-free lump sum, which will reduce the amount you receive as a regular monthly income. There are other options too:
These options are detailed in your retirement quotation. *For WPS section members, the PIE option will not be available until the WPS court case has been concluded.
This is complicated – so we recommend you get financial advice.
You can also find your own independent financial adviser using: Find a Qualified Pension Adviser to Help You Retire With Confidence. You will need to meet the cost of the advice if you choose to use your own financial adviser.
Northumbrian Water and the NWPS Trustees have appointed Origen Financial Services to provide you with paid-for advice on retiring and the options you have. They are authorised and regulated by the Financial Conduct Authority.
You find out how to get advice from Origen here or read their guide.
As you approach retirement, you’ll need to make the final decision about how you take your NWPS (and other pension scheme) benefits. Give yourself plenty of time to receive your pension pack, consider all the options and take financial advice – we recommend you start the process at least 6 months before the date you’re looking to retire, although you can start a few months earlier than this if you wish.
Remember, even if you took financial advice from Origen at an earlier date when you were planning your retirement, you can have a second round of paid-for advice from Origen at this stage. Find out how to get advice from Origen here or read their guide.
For your NWPS pension, you’ll need to contact Hymans Robertson at nwps@hymans.co.uk or request the retirement pack through the secure PRISM portal. Remember that you can generate the retirement pack instantly via the PRISM portal.
There’ll be various forms to complete and return to Hymans Robertson to:
Please note that pensions are paid on the 1st of the month for all members who have retired since 2011. Pensions for some members who retired before 2011 might be paid on a different day of the month. Generally, the cut-off date for the administrator to have processed your forms is around 14-days prior to the pension payroll date. Hymans Robertson will need to have received your completed forms 3 weeks earlier than this in order to process them and check that they don’t need any additional information from you. So that means returning the fully completed forms to Hymans Robertson 5 weeks before the 1st day of the month that you would like to receive your 1st pension payment. This is why it is a good idea to start the process early to allow time for Origen (or you own IFA) and also Hymans Robertson to help you through the process and resolve any queries.
If you have chosen a retirement date and miss the payroll cut-off date for that month, your pension will commence the following month and will be backdated to your chosen date.
Please note that your pension provider is Hymans Robertson, not Northumbrian Water.
If you have chosen to take some of your pension as a tax-free lump sum, this may be paid to you on the same date as your pension commences, or shortly before or afterwards.
There will be similar processes for each pension scheme you have.
For your State Pension, you should receive a letter around four months before your State Pension age with an invitation code and instructions. For more information, see the MoneyHelper guide to how the State Pension works.
It’s also a good idea to check if you can claim Pension Credit.
Don’t forget to keep Hymans Robertson informed of any change of address or circumstances.
And remember to keep your Expression of Wish form up to date, so that the Trustees know who you would like any benefit to be paid to in the event of your death.
You can make these changes via your online account on PRISM or by contacting Hymans Robertson.
