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During our working lives, most of us will rely on our monthly wage packet for the bulk of our income. But what about when we retire and we don’t have a regular salary coming in?

Many people will rely on separate sources of income during their retirement, so they can be confident of a steady cash flow, and be able to enjoy the kind of lifestyle they want in later life.

Here are several options you can look at.

Your Workplace Pensions

Although retirees are eligible to claim a state pension, this might not be enough to live off if you want to do more than simply make ends meet.

In retirement, you might want to enjoy hobbies and pastimes, go on lots of foreign holidays and provide for your family, and you simply can’t do this if you rely on a state pension.

However, you can pay into an unlimited number of pension schemes. A workplace pension will be set up by your employer, and they’ll contribute to it while you’re working for them. At the same time, you can set up personal and stakeholder pensions.

The amount you can earn off your pension schemes will depend on how much you pay in and how early you start paying in your contributions, so it’s worth paying as much as you can realistically afford over as long a period as possible to get the maximum returns.

Putting money into a pension scheme can also help you reduce your tax bill, as you can save between £4,000 to £40,000 tax-free into your pension every year, depending on your income.

If you’ve had several jobs throughout your working life, you may have several workplace pensions, in which case, it might be worth looking at combining them into one. That will make it much easier to keep track of your money and manage your savings for the future. It may also save you some money in the long run.

Income-generating investments

There are many investment options that can generate revenue, such as property and stocks and shares.

But be aware that this approach does not yield guaranteed returns, as markets can rise and fall due to circumstances that are completely beyond your control.

Make money with existing assets

Many households take up the option of supplementing their income by renting out something they already own, for instance a spare room or a parking space.

It’s worth remembering that the first £7,500 of income you make from renting a room is tax-free, so this could be a tax-efficient option to explore as long as you don’t go over this threshold.

Make sure you’re paying the right amount of tax

Many people wrongly believe that their pension income is tax-free, but that’s not actually the case.

A retired person can earn or receive up to £12,570 a year before they have to pay tax, and that income includes the money you receive from your pension schemes, including your state pension.

So you should make sure you’re on top of your tax arrangements and aware of what needs to be paid before you retire.

With that in mind, it’s important to make sure HMRC are aware of the various revenue streams you have set up, so you can be taxed correctly for each of them, and are able to take advantage of various tax allowances that may exist.

Keep working

Many retirees who want to earn a higher income choose to stay in work, often on a part-time basis. But it’s worth pointing out that this option isn’t always just pursued for financial reasons.

Retirees often miss the social aspect of going to work or simply want to feel useful, and find that working part-time helps them achieve the balance they want in life between work and leisure.

Find out what benefits you’re eligible for

According to Age UK, more than £2 billion of benefit income is going unclaimed every year, including pension credit and housing benefit. Yet at the same time, more than two million British pensioners are living in poverty.

So why are people not getting the support they’re entitled to get, after a lifetime of paying into the system? Age UK cites several reasons, including a lack of awareness about these benefits, many mistakenly assuming that they’re not entitled to state support and a widespread belief that the application process will be complicated.

After many years of hard work, you’re entitled to enjoy the rewards of your labour and the kind of lifestyle you want in retirement, without having to worry and count every penny. So careful planning is very important, so you can be confident of a steady and secure income.

Seek support and advice

Managing your finances can be daunting and it can be hard to know where to start. However, support and advice is out there.

For example, you can book an appointment with Pension Wise, a government service that offers free, impartial guidance and outlines the options for people with defined contribution pensions.

A specialist will outline the different options open to you, discuss the tax implications of each one and tell you what your next steps are.

Alternatively, you could find a professional, regulated financial adviser through sites such as, so you can have regular meetings about how to manage your finances and set yourself up for the future.

If you’re armed with the right knowledge, you can work out what steps you need to take to ensure you have the income you need and enjoy the retirement you deserve.

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