New research has sounded the alarm, indicating that a significant number of Britons are approaching their retirement years without adequate preparation. The study from pension provider Scottish Widows reveals that nearly a quarter of people aiming to retire by 2028 have taken no concrete steps to get ready.
The Stark Reality of Retirement Readiness
The figures are particularly concerning for those planning to stop working in 2026. Only 21 per cent of this group have created a formal retirement plan, and a mere 19 per cent have consulted a financial adviser. Furthermore, just 15 per cent have begun to adjust their working hours, and only 8 per cent have considered downsizing their home.
Robert Cochran, a pension expert at Scottish Widows, emphasised the urgency: "For those planning to retire - whether that's a goal for 2026 or the next couple of years - asking those all-important questions about your financial future now is critical." He advises starting by checking your state pension entitlement and reviewing all workplace and private pension pots.
Six Actionable Tips for Your 2026 Retirement
Cochran has outlined six practical steps for anyone targeting retirement this year to ensure they are on solid financial ground.
1. Assess Your Financial Trajectory
The first step is a thorough financial health check. This involves calculating when you can realistically afford to finish working and, crucially, estimating how long your pension savings will last. Tools like retirement calculators can provide a clear indication of whether you are on the right track.
2. Leverage Digital Tools and Apps
Download your pension provider's app to keep track of private or workplace schemes. Additionally, use the HMRC app to view your state pension forecast, including your projected weekly amount and payment start date. Comparing this against recognised living standards (a minimum of £21,600 a year for two, or £60,600 for a comfortable lifestyle) helps gauge your needed income.
3. Understand Your State Pension
The UK State Pension increased by 4.1 per cent in April 2025 due to the triple lock, making the full new State Pension £230.25 per week. It is set to rise again in April 2026 to £241.30 per week, highlighting the importance of knowing what you are entitled to.
4. Trace Lost Pension Pots
Many people have old pension savings they have forgotten. Use the Government's free pension tracing service to locate any lost pots. Start by listing every former employer and private pension you have held to build a complete picture of your savings.
5. Consider Flexible Drawdown
From age 55, you can typically access your pension flexibly, with up to 25 per cent available tax-free. This drawdown option offers control over your income but comes with investment risks and potential tax implications like the Money Purchase Annual Allowance (MPAA).
6. Explore Annuity Options
With annuity rates reaching a ten-year high, a guaranteed income for life is back in consideration. Pension annuities provide a stable, taxable income, and various products exist to suit different circumstances. Seeking professional advice is key to finding the right fit.
The Critical Need for Proactive Planning
Cochran stresses that it is never too early to envision your ideal retirement and take the necessary financial steps. With such a low percentage of imminent retirees having made plans, the message is clear: proactive engagement with your pension savings is essential to avoid sleepwalking into financial uncertainty in your later years.
