How to boost your income before and during retirement

26 March 2025

Written by Retirement Line

New data reveals that many people approaching retirement are concerned that they won’t have enough savings to support a comfortable lifestyle. Here’s how you could top up your retirement income.

A recent survey found that fewer than three-in-ten of those born between 1965 and 1980 — Generation X — feel they’re on track for a comfortable retirement. The figures significantly lag behind both younger and older generations.

Rising living costs and uncertainty over the future of the State Pension are key factors fuelling these concerns, alongside the decline of defined benefit ‘final salary’ pensions, which were once a more common safety net. 

Also, unlike younger workers who were auto-enrolled into workplace pensions earlier in their careers, many Gen Xers missed out on this initiative until later in life, leaving them with smaller pension pots.

Ten tips for boosting your income in retirement

Even though the survey suggests that Gen X leads the way in worrying about retirement finances, other groups also have concerns. Just 37% of baby boomers (born between 1946 and 1964) feel confident about their retirement savings.

The changing pension landscape, coupled with the rising cost of living, means that baby boomers at or close to retirement may need to look beyond their pension to secure their financial future. 

With inflation eroding our spending power and increasing costs for essentials such as groceries and energy, exploring ways to maximise your income in retirement can make a huge difference. 

There are several potential ways to boost your income as you approach or progress through your retirement, helping to bridge any financial gaps and provide greater security. 

1. One of the first steps is to check your entitlement to benefits. Many retirees miss out on valuable support such as Pension Credit, which can top up income and unlock additional perks like the Winter Fuel Allowance and free TV licences. It’s worth using an online benefits calculator or seeking advice to ensure you’re claiming everything you’re entitled to.

2. Reducing household bills is another effective way to free up money. Create a monthly budget to monitor spending and shop around for better deals on your energy, mobile and insurance, That could lead to significant savings over time. 

3. Likewise, clearing outstanding debts—especially those with high-interest rates—can ease financial strain and make your retirement income stretch further. If you’re struggling with your loans and credit cards, consider speaking to an organisation like National Debtline or Stepchange, who can help you.

4. If you own your home, downsizing to a smaller property can reduce living costs and release equity, or if you’d struggle living with less space, you could consider moving to a less expensive area.

5. If selling the home you love would be too upsetting or stressful, equity release may be an option worth considering. Available to homeowners aged 55+, it allows you to unlock some of your property wealth while continuing to live there until you pass away or move into long-term care. As a plan will reduce the amount of inheritance you leave, seeking specialist advice is essential before making any decisions.

6. Or why not consider taking in a lodger through the government’s Rent a Room scheme? If you have more rooms than you need, it’s a way to generate income, with up to £7,500 a year tax-free.

7. For those not yet retired, boosting your National Insurance (NI) record could increase your State Pension entitlement. If you’re not on track for the full amount, you may be able to make voluntary contributions to fill any gaps. 

8. Meanwhile, maximising workplace pension contributions is crucial if you’re still in work. Even if you can save a small amount extra each month, it all adds up and can make a big difference over the last few years of your career.

9. If you haven’t already accessed your pension fund, getting the highest income possible from your money is so important. That could mean securing the best annuity rate for a guaranteed income or choosing a drawdown product with low charges to make your savings last longer. 

10. Finally, tracking down any lost pensions could provide an unexpected boost to your retirement fund. You can use the government’s handy pension tracing service here.

Planning for retirement can feel daunting, especially with rising costs and uncertainty around pensions. However, by taking proactive steps—whether it’s claiming benefits, cutting household bills, clearing debts, or exploring ways to generate extra income—you can improve your financial position and enjoy greater security. 

Every little change can make a difference, and with the right approach, you can make your retirement savings go further and create a more comfortable future.

Source:

Fewer than three in ten of Gen Xers feel they’re on track for a comfortable retirement: Generation X say they won’t meet their retirement savings goals. Independent. Accessed 11 March 2025.