8 simple steps to completing a “mid-retirement MOT”

Often, the run-up to retirement is the time in a person’s life when they pay the most attention to their finances.

Going from full-time work to drawing from your private pensions, receiving the State Pension, and using up your other savings and investments requires a significant adjustment, as well as a solid plan to make sure you remain on track.

That said, you can’t necessarily rest on your laurels once you get used to being retired. It is still worth examining your financial situation on a regular basis – especially once you reach mid-retirement.

Depending on how long you live, mid-retirement could be anywhere from your early 70s to your early 80s. If you have been retired for more than a decade, as a rule of thumb, it’s worth completing a “mid-retirement MOT”.

Doing so could:

• Ensure you’re not spending your money too quickly
• Help you mitigate how much tax you pay, where possible
• Keep your financial arrangements in line with new government regulations
• Give you the peace of mind to keep living life to the fullest in retirement.

Here are eight simple steps for completing your mid-retirement MOT.

1. Gather all your financial information

First, just as a mechanic begins an MOT by inspecting your vehicle, you should start by gathering your financial records in one place.

Start by getting statements or key documents for your:

• Pensions
• Savings
• Investments
• Mortgages
• Current accounts
• Credit cards
• Insurance
• Credit file
• Income from part-time work, the State Pension, or trusts.

If you share some or all your assets with a partner, civil partner, or spouse, it’s worth doing this together. It may be useful, if you can, to look back at annual statements since you retired to get a sense of the big picture.

2. Check each element carefully

Now it’s time to comb through each of the above elements in detail.

You want to ensure that your information is all up to date (for instance, if you’ve moved house) and that there are no big surprises (like a sudden drop in the value of your investments) that require closer attention.

These first two steps form an essential overview of your financial situation in retirement. It may highlight gaps in your plan or help you adjust how you’re spending, saving, and investing, areas that the next seven steps will address.

3. Work out whether you’re on track to run out of money

Perhaps the most important aspect of your mid-retirement MOT is a spending assessment. Look at how much you are spending each month or year and measure this against the funds you have remaining.

If you find you are overspending and are at risk of running out of funds later in life, now is the time to act. This is especially important, as your spending could rise as you get older due to the high cost of care for self-funders.

It may help to:

• Review your spending and cut back on luxuries
• Assess the amount of financial support you’re giving to family members and consider reducing it
• Download a budgeting app to help with day-to-day spending.

On the other hand, you could find that you’re spending less than you can afford. This doesn’t mean you need to spend more, of course, but it does give you wiggle room to treat yourself or a loved one more frequently if you wish.

4. Look at how much tax you are paying

As a retiree, you will likely pay Income Tax on:

• Income from part-time work or properties you own that exceeds the Personal Allowance of £12,570 (frozen until 2031)
• Anything you draw from your private pensions above your 25% tax-free cash entitlement
• Some income from any trusts that name you as a beneficiary
• Dividends above £500 you receive from a business, which are taxed at Dividend Tax rates
• Interest on some savings outside of an ISA.

You could also pay Capital Gains Tax (CGT) on profits from certain assets you dispose of, such as:

• Shares held outside an ISA
• Business assets
• Properties that aren’t your main home
• Belongings worth more than £6,000, except your car.

The CGT Annual Exempt Amount stands at £3,000 a year as of 2025/26, above which you’ll likely pay tax on any profits.

If you have been drawing income from several sources at once, there may be ways to make your income more tax-efficient. During your mid-retirement MOT, it’s useful to assess your tax situation and use all the available tax breaks (a financial planner can help with this).

You could also use this time to look at whether your estate could be liable for Inheritance Tax (IHT) when you pass away. You can read more about who pays IHT on the government website.

5. Ensure your money and assets are adequately protected

Financial protection is a central pillar of any financial plan. Without it, you and your loved ones could be vulnerable to financial loss if the worst happens.

You may already have life insurance, critical illness cover, home insurance, and vehicle insurance set up. If you don’t, it may be wise to investigate appropriate cover as part of your mid-retirement MOT.

If you do have existing protection in place, you may wish to check whether:

• Your details, such as your address, are up to date
• The amount of protection you have is still appropriate for your circumstances
• You can affordably keep up with premium payments.

Along with the above, you may wish to revisit your emergency fund and make sure:

• It is still enough to cover basic expenses if something goes wrong
• Your funds are being kept in an accessible savings account that pays a competitive interest rate.

Keep in mind that as the cost of living increases, the amount you need in your emergency fund could rise too.

Finally, while thinking about how to protect your money from the unexpected, take the time to check over your will and ensure it is correct, valid, and up to date. This can help to prevent your loved ones from becoming involved in costly disputes after you pass away.

6. Read up on the latest financial legislation

It can be hard to keep up with all the changes the government puts in place year-on-year. But if you are assuming that the rules are still the same as when you retired, you may be doing yourself a financial disservice.

For example, if you retired in 2016, the CGT Annual Exempt Amount was £11,100 for most earners. In other words, you could have sold £11,100 of taxable assets each year without paying any CGT.

Now, the Annual Exempt Amount is just £3,000. Your tax break has shrunk to nearly a quarter of what it was a decade ago – so your strategy for disposing of investments could be outdated.

A financial planner can help you stay abreast of any important legislative changes.

7. Revisit your retirement goals or set new ones

Retirement isn’t really about money. The most important thing is that you’re able to reach your personal goals – and money acts as a vehicle for getting there.

So, although reviewing your finances is an important part of your mid-retirement MOT, remember that your goals should remain front and centre.

Here are some tips to get started:

• Think about what is most important to you now, and what could remain so for the next 10, 20, or 30 years. It helps to write these priorities down, as you may be more likely to put them into action.
• If you began retirement with a set of goals in mind, revisit them. Have you managed to tick that once-in-a-lifetime trip off your bucket list, or has it been put on the back burner?
• Perhaps your life has changed a lot since you retired. You could have been bereaved, divorced, or welcomed new grandchildren into your family. It’s okay to amend goals you previously held dear based on your new circumstances – and your mid-retirement MOT is the ideal time to do so.

8. Contact a financial planner for professional advice

So many people reach retirement, pause for thought, and ask, “What now?”

Whether you are years away from retirement, about to take the leap, or already years into it, working with a professional who cares about your goals, concerns, and wellbeing could make a big difference.

At Kellands, we have decades of experience working with those who want to live life to the fullest in retirement, free from unnecessary financial stress.

Email us at hale@kelland.co.uk or call 0161 929 8838, to discover how we can help you.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, tax planning, trusts, or will writing.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Note that life insurance and financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation. 

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