Couple by the seasideNationwide
During life's journey there are a number of life-changing scenarios that we will all have to face and moving from a working life into retirement is certainly a major one.

Whilst many of us look forward to retirement in the hope we can sit back and enjoy the fruits of our hard-earned labour, in reality the transition can be quite daunting.

So how can you make the most of your pension savings to ensure that you can afford the lifestyle that we all hope our retirement will provide?

Where can you go for advice or information to cut through the jargon and fully understand what options are available to you and ensure you get the best possible retirement income? Nationwide's 10 step guide is here to help.

1. Plan ahead

Looking to retire in the next year or two? Then it's time to consider and research your options. Failing to plan is planning to fail!

2. Shop around

Everyone has the right to use the 'open market option'. Simply, this just means that you have the right to shop around and you don't have to accept the annuity offer from your pension provider. Shopping around often results in a higher retirement income - up to 20% for standard annuities.

3. Consider your health

Do you smoke or have common health issues like high blood pressure or diabetes? You could qualify for a better retirement income - up to 40% more - from an enhanced annuity provider. As the annuity market takes into consideration over 1,500 conditions and lifestyle factors, checking to see if you're eligible should be one of the first considerations of your retirement income plans.

4. Think about inflation

Another factor to consider is whether you want a level retirement income or one that increases every year in line with inflation. Your purchasing power will be protected if you opt for the latter, but your initial retirement income will be lower.

5. Watch guarantees

Before transferring old plans, ensure there aren't valuable guarantees that will be lost if you switch away from your original pension provider.

6. Consider your other half

Would your spouse or civil partner struggle to maintain his or her standard of living if you died and your retirement payments stopped? If so, consider a joint life annuity. You can choose to have income paid to your spouse at the same level as when you were alive or at two-thirds or half.

7. Protect against premature death

You can also opt for an annuity which is guaranteed to be paid for at least five or ten years, even if you die before then. Remember that the more guarantees you build in, the lower your retirement income will be at the outset.

8. Go for a one-stop shop

There's a lot to consider, so why not enlist the services of a company who can do the hard work for you. Nationwide has an annuity service offering products from a panel of leading annuity providers consisting of Aviva, Canada Life, Just Retirement, LV=, Legal & General and Partnership. These six providers have a combined market share of 88%*.

9. If unsure, seek advice

For most people, the right annuity is the one that pays the most income. But it's important to ensure you find one that can be shaped to your own personal circumstances. At Nationwide, our Senior Financial Consultants can talk you through the options, clearly explain the implications and help you find the right type of annuity for you.

10. Remember there's no going back

You can't change your annuity further down the line, so make sure you invest the time to get it right. To find out more visit the Nationwide annuity website.

*Combined annuity provider market share figure for a 12 month period, Q4 2010 to Q3 2011.

The Nationwide Annuity Service is provided by Nationwide Building Society and administered by The Open Market Annuity Service Limited (TOMAS). The Open Market Annuity Service is an appointed representative of Just Retirement Solutions Limited which is authorised and regulated by the Financial Services Authority (FSA) under registration number 455713.

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