Last updated 09:19, Friday, 10 October 2008

Retirement is often described as the ‘golden years’. Free from the burden of work, you can enjoy yourself with your family and do the things you’ve always wanted to do.

The golden years... But only if you start planning for it while you are still working. Retirement could last for 30 years or more

However, as with all good things, there’s a catch. Unfortunately, you need to start paying for the ‘golden years now.

Saving for retirement is not something a lot of people want to think about, particularly in the current financial climate, but we should all be planning ahead – retirement could last for 20 or 30 years or even more.

To start planning, you’ll need to consider the following: How much money would you like to live on when you retire? Think about how your spending habits might change when you stop working – you may spend less on some items, such as travelling to work, but more on others, such as heating. Consider how the amount of money you need might change as you get older and allow for the effects of inflation.

Of course, there is the state pension, but this may not be enough to give you the standard of living you want when you retire.

When do you want to retire? The longer you work, the longer you will have to build up your retirement savings.

The earlier you want to retire, the more savings you will need to give you a particular level of income in retirement.

How much can you afford to save at the moment? The more money you want to live on when you retire, the more savings you will need. So, the more you can put aside now, the better your chances of having the income you want when you retire.

Consider what state pension you can expect to get when you retire, but remember that there may be changes to the state scheme before then.

If you are not in a pension scheme in your employment, find out whether there is one – if there is, it might be worthwhile joining it.

If you are already a member of your employer’s scheme, you might be able to make additional contributions to boost your pension. Your employer should be able to give you more information.

If your employer does not have a scheme in place, you could consider saving in a personal pension scheme or stakeholder pension.

You might also want to think about putting some money aside in other savings and investment products.

Check whether you have any old pensions which you are no longer paying into. If so, find out what pension you can expect from them too.

If you’ve lost track of any pensions from a previous job, the Pension Tracing Service may be able to help you (www.thepensionservice.gov.uk)

Whatever plans you make for your retirement, remember to review them from time to time to make sure they’re on track to give you the income you expect when you retire.

If you would like to talk to someone about your retirement plans, speak to one of the Cumberland’s financial planning consultants who can advise you on the best way to prepare for your ‘golden years’.

Any financial advice will relate only to the products and services of the Cumberland Building Society and Norwich Union.

Phillip Ward is a marketing manager at the Cumberland Building Society. Visit the website at www.cumberland.co.uk

This article should not be relied upon when making investment decisions. Always obtain financial advice.