Have you got enough to retire on?

The relentless flow of bad news for anyone approaching retirement age continues. This week's victims are mainly women. According to insurer LV=, 6.5 million people aged 50 or over intend to work for an extra 6.2 years on average past standard retirement age (currently 65 for men and 60 for women, but 66 for both from 2020). Of these around four million are women. A happy few said they planned to keep working just because they loved their job but about half of those surveyed blamed a lack of retirement funds. Meanwhile, some 4.3 million over-50s have returned to work having already retired, realising that they are unable to afford the lifestyle they had hoped for.

So how can you avoid this? What factors do you need to take into account when deciding whether and when you can comfortably retire? The first thing to consider obviously is your income. If you are lucky enough to be a member of a final-salary pension scheme, this is likely to be defined as a fixed proportion of your final, or working life average', salary. So you'll have a decent idea of what you might get. But for those in money-purchase schemes, where you and your employer make a fixed monthly contribution to a savings plan, the estimate is trickier.

Try looking at your latest plan summary and valuation from your pension provider. This should include an estimate of what annual income you can expect at your chosen retirement date, based on certain assumptions about growth rates. Under new guidelines from the regulator, pension funds will have to revise growth estimates downwards from 2014 when giving out these figures anything above 5% is unrealistic, so make sure you err on the low side rather than rely on the biggest quote.

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Now take a look at your likely outgoings. Here there is some, rare, good news. Most of us shouldn't need as much money at 65 as we do at 50. Why? Hopefully some of your bigger overheads, such as a mortgage and school fees, will have either gone or be substantially cut. Next, if you have always paid into a money purchase plan while working, you clearly won't be paying in once you retire, so there's another saving. Expensive work clothes will be a thing of the past, as will commuting costs. You'll also get odd bits of help from the state in the form of a higher personal allowance for income tax, a winter fuel allowance and discounted rail and bus fares. Yes, building up a retirement pot is tough. But don't frighten yourself more than you need to.