If you have retirement in your sights at some time over the next 20 years, perhaps it’s worth finding out if your financial plans are on course… by Tony Watts OBE

Even blindingly obvious ideas can sometimes take a bewilderingly long time to come to fruition, and a concept I and others working in the later life field were consulted on about five years ago – the “Mid Life MOT” – is now Government policy.

Nothing to do with checking out whether all your parts are functioning correctly and applying a strategic squirt of WD40 where it’s starting to squeak. This is all about an individual undertaking a detailed assessment of their current savings, pensions and assets, projecting forward to see when they might be able to give up (or cut back on) the nine-to-five and still afford the lifestyle they aspire to in retirement.

Minister for pensions and financial inclusion Guy Opperman is currently pressing hard for individuals from their late 40s onwards to be taking a “Mid-Life MOT” in order to make sure their future retirement plans are on course.

Knowing that allows you to plan your long-term future and also – ideally – negotiate with your employer on when you might start to reduce your work commitments.

It will also provide the good/bad news on how much you need to be putting aside for your retirement… and possibly salting away more (if that is feasible).

In the words of Guy Opperman, “Getting the correct information and guidance can make a huge difference to your quality of life in retirement.

“This is where the mid-life MOT can help. It does not necessarily need to be at a defined point in our lives and could, for example, be in your mid 40s at a time when someone might value support and help to understand their finances and the options available to achieve the kind of retirement they would like.”

But like an MOT for your car, you need the right tools to do a proper job.

To start, you need to know just how much you need to have saved up in order to finance the retirement you are planning and when it might be possible to retire at your current rate of savings. Ideally, you should also be able to play through a few different scenarios – such as retiring early, receiving an inheritance at some time in the future or downsizing.

Go to a financial advisor and they’ll have a sophisticated cashflow planner to hand that can make those sorts of clever calculations… but you can do exactly the same with the RetireEasy LifePlan.

At a glance you can have an overview of all of your assets – property, investments, pensions, savings, business assets – and the income you will receive after liabilities such as debts, mortgages and income tax throughout very year for the rest of your life. The Premium version of LifePlan also provides live updates on stocks and fund values, provided by Morningstar, and you can model a Lifetime Mortgage into your plans.

Knowing whether you are going to drain down your assets on your predicted annual spending – or whether you could comfortably take out more and so make more of your retirement years – can make a massive difference to how fruitfully and enjoyably you spend the years to come.

From the Government’s perspective, that level of knowledge assists their drive to encourage more of us to remain economically active in later life, but from the individual’s point of view, it can show you when you could afford, for instance, to start reducing your work commitments later in life.

If you want to see if your financial plans would pass an “MOT”, log on to www.retireeasy.co.uk