Where will my retirement income come from? Part 2

In addition to traditional pension schemes there are a variety of other investment options which can be used to provide income in retirement.

Individual Savings Accounts (ISAs)

Some people might use money they have in an ISA as a source of income in retirement.
For example, there are cash ISAs, which you can save into and potentially earn some interest. There are other types of ISAs where your money’s invested. Again, keep in mind that the value of investments can go down as well as up and could be worth less than was paid in.
A Lifetime ISA (LISA) is a type of ISA that’s intended to help people save for first homes or for retirement. You can start saving into one between the ages of 18 and 39. You can put up to £4,000 per year into one of these until you’re 50 (you can just save into it or your money can be invested – your choice). The government will give you a 25% bonus, capped at £1,000 a year.
The money you take out of a LISA is tax-free. You won’t pay a withdrawal penalty as long as you don’t access the money until after you’ve turned 60.


Some retirees may get some of their money in retirement from rental income if they have buy-to-let properties. But getting a regular income from property will depend on the property being let at all times, which may not always be possible.
Remember, you pay income tax on rental income.

Will I have enough income in retirement?

Whether you’ll have enough income to fund your life in retirement depends on the kind of lifestyle you want.
The Retirement Living Standards – from the Pensions and Lifetime Savings Association (PLSA) – show how much money you might need for a minimum, moderate or comfortable lifestyle in retirement.
According to the Standards, a single person could need £12,800 per year to achieve the ‘minimum’ lifestyle. The full new State Pension falls short of this by over £2,000, so it’s important to have other ways of supporting yourself.

Once you understand where your money is likely to come from, you can get thinking about whether you’re on track for your ideal retirement.

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