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CHAPTER 6


employment in preparation for retirement, it is important to think about how your finances will be affected.


Even if you have saved up for this stage in your life, it is very likely that the amount of money that turns up in your bank account every month will drop dramatically. Analysis of official tax data shows that most people lose a third of their monthly income when they retire, while many lose even more. Forewarned is forearmed, so it is worth getting the facts straight about how your circumstances will change as soon as possible. Financial realities are not always easy to face -- but once you know the facts you can make the best of what you have.


If you are yet to retire, the first step is to get estimates of what you will receive from any pensions that you have. The government will give you a state pension statement as long as you are more than four months away from state pension age, and you can write to the trustees of your private pension schemes to get similar forecasts. If there is still some time until you retire, you may be able to plan to save more in order to retire more comfortably. But if you’ve already stopped working, you’ll be more aware of the money you have coming in each month, and may feel you have missed the window for maximising your income. Be aware that you may not be getting all of the cash to which you’re entitled. It’s easy to forget about pensions from old employers, or not be aware of benefits that you should be claiming from the government. This is illustrated by figures


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