Margaret is 55. Her State Pension age and her NEST retirement age are both 66.
She's been planning to retire then, start getting her State Pension and take her money out of NEST. Her NEST retirement pot is now worth about £20,000 and she still contributes £50 per month. Her employer also contributes £37.50 per month and she gets tax relief from the government of £12.50 per month, which gives her total contributions of £100 per month.
She's heard that she might be able to increase her retirement income if she delays taking her money out of NEST.
Margaret looks at NEST's Pension Calculator. It tells her that she might get a retirement pot of just over £49,400 at age 66. She may be able to use this to:
Margaret thinks about the amount she earns and spends today. She's not sure this amount of retirement income will be enough for her, even once the mortgage is paid off. She decides to look into working for a bit longer and continuing to contribute.
She's interested to find out how much difference it could make to her retirement income from NEST if she started taking it later.
Margaret uses the Pension Calculator again to see what would happen if she changed her NEST retirement age to 68. She sees that she might get a retirement pot of over £54,800. She could use this to take up to around £13,700 as tax-free cash, plus a regular income of around £2,430 a year for the rest of her life.
Margaret uses the Pension Calculator again to see what would happen if she changed her NEST retirement age to 70. She sees that she might get a retirement pot of just under £60,500. This is almost £11,100 more than the value at age 66. She may be able to use this to take up to around £15,100 as tax-free cash, plus a regular income of around £2,840 a year for the rest of her life.
Note: Please let us know if you decide to change your NEST retirement date. This will help us make sure we manage your retirement pot to be ready for the date when you want to take your money out.
Margaret gets basic rate tax relief from the government. This comes to a quarter of her own contributions. All contributions are shown in today's money – this is explained at the bottom of this page. The contributions to Margaret's pot actually increase each year in line with inflation.
Margaret's retirement pot is invested in a NEST Retirement Date Fund. Each year, we've assumed that her pot grows in value because of the return on her NEST investments, minus the charges she pays to NEST. We assume this growth is between 2 and 3 per cent more than inflation for every year until Margaret's NEST retirement age.
All the amounts are worked out in today's money, which means we’re showing what Margaret's retirement pot may be worth today. This is different from the amount she'll actually get when she takes her money out of NEST.
Here's an example: