State Pension warning as expert urges retirees to use 6% rule

Planning your retirement can be stressful but understanding your finances is essential to ensure a peaceful retirement. Too many, however, make a mistake in the run-up to their pension age, which could land them into financial trouble later in life, an expert said.

Cuan Tait, Chartered Financial Planner at Raymond James Barbican, sees people make this mistake all the time. The expert helps people bring structure to their finances and plan confidently for the future - and now he has shared his top tips.

He says: "Don't rely on the state pension to get you through, £230 a week isn't much and it barely covers the basics.

"If you're within 10 years of retiring, start sorting it now. Check your forecast, fill the NI gaps, add what you can to your workplace pension."

The expert also urged prospective retirees to consider whether they need and want to retire as soon as possible - as not doing so may be beneficial in the future.

He told the Express: "If you can afford to delay taking your state pension, it goes up about 6% for each year you wait, but only do that if you've got other income to live on.

"The rule's still the same really, hope for the best, plan for the worst, and don't leave it too late to act."

Being prepared will help you retire feeling less stressed and with a better understanding of your financial situation.

With the upcoming Budget in November, Chancellor Rachel Reeves could make changes to the way pensions work.

Former pensions minister Ros Altman says there are multiple ways the Reeves could shake things up.

On This Is Money, he says: "Because so much public money is spent on pensions, and many commentators believe money should be redistributed away from the old to the young, several radical ideas have been proposed.

"The Chancellor Rachel Reeves should aim to change as little as possible in the near-term and avoid adding new complexities, while ideally encouraging more pension contributions to benefit British growth and investment.

"Pensions could help revive the British economy, but damaging policy changes could also undermine the whole concept of pension saving and destroy confidence for the future, leaving millions poorer in later life."