Other income sources
There are other sources you can use to generate or boost your income in retirement.
These are savings, investments, paid employment, income from property and if you are entitled, state benefits and allowances, remember not all are means tested.
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Bank/Building Society Savings +
Bank and Building Society savings are not exposed to any significant risk but over time can have their value eroded by inflation.
If you don’t have much paperwork, it might be worth popping into or telephoning all the banks and building societies you have had dealings with during your life and checking to see if you still have any accounts with them.
Once you know how much you have, and if you can afford to, consider putting some into a savings account with a longer notice period or a fixed term that’s likely to have a higher rate of interest and/or bonus.
If you are prepared to risk part of your savings consider moving some of your cash into an investment. Just make sure you understand the level of risk you’re taking when you choose the investment account. Remember the value of investments can go down as well as up.
Shop around for the best savings rates in the papers and online. Companies continually change their products and rates so it’s worth sparing some time to review what’s on offer against what you’re getting.
It is worth using your annual cash ISA allowance to ensure you benefit from tax-free interest. Again it’s important to shop around for the best deal.
You may have saved money using a variety of financial products and these should be considered when you are thinking about your income in retirement. Having other savings may mean that you aren’t necessarily very reliant on your pension savings and the income it generates when you retire. These could be:
- Stocks and shares ISAs
- Variety of other investment plans
Income from property +
You don’t have to own more than one property to generate an income. As well as renting out a whole property you could earn an income from renting out rooms you don’t use in your home. Currently, if you make money from your home, the first £7,500 a year is tax free.
Alternatively you could sell your property and move to a smaller, cheaper one. Whilst this can be costly in terms of the emotional ties to the property and the financial resources needed to sell up, it could leave you overall in a stronger financial position.
If you’re after funds for home improvements it is worth checking with your local council to see if any grants or loans are available for the work you’d like to do.
Paid employment +
These days it is no longer legal to force someone to retire at a certain age. You can continue to work in your current role for as long as you are able to or wish to. Alternatively some people choose to retire from their career and then find paid or voluntary employment doing something they enjoy.