15 million people across the UK are currently under-saving for retirement, according to FTAdviser, leaving certain groups facing a “severe cliff-edge”.
Even if you have a financial plan in place, it’s easy for media noise and self-doubt to make you feel uncertain whether your current savings and investing strategy will be enough to meet your objectives.
However, certain positive signs can help you find reassurance about your financial health.
1. You regularly contribute to a pension and take full advantage of tax relief
If you have a defined contribution (DC) pension, such as a workplace pot or a self-invested personal pension (SIPP), your contributions are invested and may benefit from market growth. Any returns you receive are normally reinvested, allowing growth to compound over time.
If you have been contributing to your pension regularly over a long period, you are giving your wealth more opportunity to grow.
Pension contributions can also be tax-efficient. You receive tax relief on what you pay in up to the Annual Allowance: either 100% of your earnings or £60,000 (unless tapered) for the 2026/27 tax year, whichever is lower.
Note that your Annual Allowance can be reduced to as little as £10,000 if you are a very high earner or if you have flexibly accessed your pension.
Tax relief is proportional to your Income Tax bracket. While the basic rate (20%) is usually applied automatically, if you are a higher- or additional-rate taxpayer, you will have to claim this relief directly from HMRC.
If you are already taking full advantage of your pension’s tax efficiency, you are ensuring that as much of your wealth as possible is funding your objectives. If not, a financial planner can help your pension wealth get back on track.
2. You’re using your ISA allowance each year
While your pension usually takes priority in your retirement plan, ISAs are another great option for boosting your tax-efficient wealth. Funds held in an ISA are free from Income Tax, Dividend Tax, and Capital Gains Tax (CGT).
This tax efficiency extends up to the annual subscription amount, currently £20,000 for the 2026/27 tax year. This limit is individual, meaning if you are married or have a partner, you can both access £40,000 worth of ISA wealth each tax year.
You can invest any surplus income into a Stocks and Shares ISA to benefit from tax-efficient investment growth. Alternatively, you can hold wealth in a Cash ISA to receive tax-free interest growth (note that the Cash ISA limit is reducing to £12,000 from April 2027).
If you are regularly contributing to an ISA, you are enhancing the tax efficiency of your wealth, as well as strengthening your retirement income by diversifying your income sources.
3. Your assets are diversified to maximise the chance of stable, long-term growth
If you have assets outside your ISA or pension – such as shares in a business or a second property – profits you earn may be liable for CGT over the Annual Exempt Amount of £3,000 for the 2026/27 tax year. This is only payable when you sell the asset, not on an ongoing basis.
Despite the chance that CGT could be levied, it may still be worth holding a diverse portfolio of assets that could provide an income when you retire.
These could include:
- Property
- Business shares
- Equities
- Commodities
- Bonds
Diversifying your income streams can reduce overreliance on your pension or savings and increase the security of your retirement wealth. For example, if market conditions reduced any dividend income you received from business investments, you may still have reliable income coming in from elsewhere.
4. Your cashflow projections look positive, and you receive regular financial advice
It’s impossible to predict the future with 100% accuracy. However, cashflow modelling can provide data-driven projections for your wealth.
For example, if you’re concerned that you’re currently under-saving for retirement, cashflow modelling maps out what your contributions could amount to over time, which your planner can then align with your retirement objectives.
We can also stress-test your financial plan against various “what if” scenarios, including:
- Level of investment growth
- Inflation rates
- Unexpected life events, like the death of your partner
- Economic events, such as geopolitical conflict.
Regular reviews with your financial planner also ensure that your savings goals remain on track and aligned with your current expectations for the future, which might change over time.
It’s important that you speak to your planner about any anxieties you might have, as they can offer reassurance about your long-term plans.
5. Thoughts of retirement bring you peace of mind
The ultimate goal of any well-designed financial plan is to bring you peace of mind about your wealth.
Therefore, with a strong plan in place, retirement should make you feel optimistic rather than anxious.
If you are feeling nervous for any reason, reach out to your Milsted Langdon financial planner today.
A quick chat can help put your mind at ease, restore confidence about your financial plan, and rekindle your excitement for retirement.
Please get in touch or email us at advice@mlifa.co.uk for more information.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate cashflow planning or tax planning.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.