Ten Pension Tips I'd Give a Friend

A year of building this calculator, modelling my own early-retirement plan, and (lately) fielding emails from sharp-eyed readers has thrown up a pile of small, high-value things that rarely make the headlines. Here are ten of them.

1. Check your State Pension forecast, and your partner's

Two minutes at gov.uk/check-state-pension. The full new State Pension is £12,548 a year in 2026/27, but only if you've built up 35 qualifying years of National Insurance. Most people have never actually looked, and the gaps that turn up are often fixable if you catch them in time.

2. Fill National Insurance gaps with voluntary contributions

A missing year topped up under Class 3 costs around £910 and adds roughly £358 a year to your State Pension for life, with the triple lock on top. It pays for itself about three years after you start claiming, and everything after that is profit. I struggle to name a safer, higher-return investment available to an ordinary person. Call the Future Pension Centre first, because some years move your forecast and some don't.

3. The £720 a year almost nobody claims (thanks to a reader for the nudge)

A reader emailed to ask why I'd never mentioned this one, and he was right to. Anyone under 75 can pay £2,880 into a pension and the government tops it up to £3,600, even with no earnings at all. For a non-taxpaying spouse who can later draw it back out within their personal allowance, that's a 25% turn on your money for filling in a form. For a basic-rate taxpayer it's smaller, but it's still free money the taxman hands you for asking.

4. Draw your money in the right order

In retirement the sequence you spend things in quietly decides your tax bill. Broadly: live off cash and any short-gilt money first, then ISAs, then the tax-free quarter of your pension, and only then taxable pension income, kept inside the basic-rate band wherever you can. Get the order wrong and you hand HMRC money you never needed to part with.

Update, 9 September 2026. A reader with thirty years in DC pensions (thank you, Will) pointed out the exception, and it is a big one. If your pot is large enough to hit the £268,275 cap on tax-free cash, the order flips. Once the cap is reached, every pound of growth inside the pension is fully taxable when it comes out, while the same growth inside an ISA never is. So for those people the better plan is to take the tax-free cash as early as the rules allow, in £20,000 slices (£40,000 for a couple) that go straight into that year's ISA allowance, so nothing waits in a taxable account. It can take a decade and needs planning. The 2027 inheritance tax change points the same way. One thing in the other column: crystallising early gives up the pre-75 death benefit treatment while it still exists. And a reason the cap is under-appreciated: most people model in real terms and assume the limits rise too. They don't. Look at the nominal numbers and a fixed £268,275 comes into view. It is a plan for a particular kind of pot, not a rule for everyone.

5. Use both personal allowances if you're married

Each of you has a £12,570 tax-free band. Spreading income across both of you, rather than piling it onto the higher earner, can give a couple more than £25,000 of tax-free income a year. If one of you has a much smaller pension, paying a bit more into theirs in the years before retirement makes this far easier to pull off.

6. Build a cash-and-gilt ladder for the first few years

The nastiest risk in early retirement is a market drop in year one forcing you to sell investments cheap just to live. Holding two or three years of spending in cash or short-dated gilts means you simply don't have to, and you ride the dip out. Gilt yields are the highest they've been in well over a decade, which makes right now an unusually good moment to set one up.

7. Be honest with yourself about deferring the State Pension

Deferring adds about 5.8% a year, but the breakeven is roughly 17 years, so for most people it's close to a coin flip (a sharp reader rightly pulled me up for once overstating this). It genuinely helps in one situation: if you'll still be a higher-rate taxpayer at State Pension Age because you're still working or consulting. Then deferring until you stop drags the income out of the 40% band and you collect the uplift as a bonus.

8. Move your pension into an ISA a slice at a time

Each year you can draw your pension up to the top of the basic-rate band, and if you don't need all of it to live on, move the surplus into an ISA. Over a decade or two that shifts money out of a wrapper that will always be taxed when you draw it, into one that never will. It's slow, dull, and one of the best ways to protect your future income against whatever a future Chancellor decides to do.

9. Watch the £100,000 trap

Between £100,000 and £125,140 of income, your personal allowance is gradually taken away, creating an effective tax rate of 60% on that slice. A big one-off pension withdrawal can tip you straight into it without warning. If you're near the line, spreading withdrawals across tax years to stay under £100,000 can save you a startling amount.

10. Mind the 2027 pension change, and your nomination form

From April 2027 unused pension funds fall inside your estate for inheritance tax, which turns the old "spend the pension last" advice on its head for some people. Whatever you decide to do about it, make sure your Expression of Wishes form is up to date with every pension provider you have. It's the cheapest and most-ignored piece of estate planning going, and it decides who actually gets the money.

Run your own numbers

Most of these have a knob you can turn in the calculator — the draw order, the gilt ladder, the SIPP-to-ISA move, deferring the State Pension, the £3,600 contribution. It won't tell you what to do, but it'll show you what each lever does to your own plan, which is usually enough to make the decision obvious.

Still not a financial adviser. Figures are correct for 2026/27 but rates change every year, so always verify on gov.uk and take proper advice before acting.