Every year, countless people approach retirement with the worrying realisation that their private pension is not going to be enough to live on.  According to a recent survey carried out by Prudential, more than one in seven of those planning to retire in 2015 will either be totally or heavily dependent on the state pension. The most you can get when you reach state pension age is £115.95 per week, which falls desperately short of the £10,000 a year most UK pensioners feel they would need to live on during retirement. This harsh reality means a private pension is essential, if you don’t want to continue working well into your twilight years.

Our pension has to fund our lifestyle for 20 to 30 years after we retire or reach state pension age so ignoring the need for a private pension is no longer a viable option. Assessing your pension pot as you approach retirement, with tools such as online planners and pension calculators, is very important as you will be faced with many options when you do hit retirement age so you must ensure you are ready.

Beware of annuity options

Even if we’ve followed all the rules and our pension pots are in place, be careful of annuity options. At retirement age you can often take up to 25 per cent of your pension tax-free with the remaining being taken as a taxable income. This is possible through an annuity which offers a guaranteed income for life but there are many annuities available. It’s important to do your research  and not just go with the plan your pension holder offers as once you take it out you can’t change it.

You don’t have to take out an annuity, you could opt to re-invest the rest into investment funds which could give you more but it’s not a guaranteed income for life.

Get the right advice

If you’ve never used a financial adviser before it should be a serious consideration as you approach retirement. This is vital given the new pension rules which offer many opportunities for your money. Get a pension forecast six to 12 months before you retire and let HMRC know you are going to retire four months beforehand. The right advice will help to eliminate the risks for those of us that don’t know what we’re doing.

Putting your eggs in one basket

Many of us rely on our home to provide us with some kind of income when we retire which is understandable given the rate that house prices are going up. But this isn’t often realistic as the only way we can access the equity in our home is by selling it, which is only possible if you want to trade down.

Leaning on your partner

With the introduction of the new state pension in 2016 comes the end of the married person’s allowance. This allowance has meant people with few state pension entitlements can get a top up by using their partner’s National Insurance record. However when new rules come in the pension allowance will solely rely on the individual’s national insurance contributions thus making it crucial we all take responsibility for our own pension pot.

Being prepared before your retirement date will ensure you don’t get any unwanted surprises when you retire in terms of income. There are many ways to top up your pension pot and it’s important to take advantage of these and speak to a professional before you start accessing your funds.