Introduction
It’s worth repeating – one in six over 55’s have NO pension savings.
That is a statistic that should frighten anyone! Private pensions are vital for the vast majority of people. State pensions are a lifeline for many others on low incomes.
Yet, there it is, in black and white, thousands of UK adults have no pensions at all when they reach 55.
Is it too late for them?
No. But they simply must start to act now to save and put money away for when they can no longer work.
This article examines the situation and provides some guidelines to help if you are one of the 1 in 6. Or maybe you know someone who falls into this category and needs a wake-up call!
What is The Situation?
A report into pensions and UK adults aged 55+ shows:
- 17% have no pension savings and rely on the state pension only
- 21% have no private pensions
Yet:
- 45% of British adults hope for a minimum retirement income £20,000 a year
- 61% hope for a minimum £10,000
All this while the maximum state pension is just over £9,000 a year!
You don’t need to be a mathematics genius to realise a LOT of people are going to be in serious financial difficulties in years to come.
How Are People Getting Out of the Situation?
One good thing is, as people get older, they do become aware that they may be in financial trouble with no pension behind them.
Interestingly, there are even adults under 35 who say they have no pension, even when the workplace pension scheme is a decade old.
Automatic Enrolment was introduced following the Pensions Act 2008. The implementation of the legislative requirement to automatically enrol eligible employees into a workplace pension began in October 2012. (Gov.uk)
This is an important thing to note, because it’s not uncommon for people to forget if they have a pension or not.
Maybe you have worked in many jobs over the years? Or jobs for not very long?
You may find you have a number of pensions started thanks to auto-enrolment.
Pension Pots – The Forgotten Numbers
Apparently, according to research, 1 in 5 people are not aware if they have pension savings. Or how much is in them if they do.
- 24% of them are the over 55s
If this is you, then having a trawl through your job history may jog some memories of past pension placements. Because in the days before auto-enrolment (pre 2008) your employer may have activated a pension for you. Or you may have been encouraged to join one, and did.
If you are in doubt about any pension pots you may have, get in touch with the Pension Tracing Service. It’s government-run and free to access.
I’m 55+ and Have NO Pension, What Can I Do?
Firstly, don’t despair.
Secondly, think positively.
If you have no pension, then it’s not too late to start one. Even if you do have one, maybe it’s not going to provide you with the income you were hoping.
Either way, the important thing to do is MAKE A START at saving and saving more.
You can start putting money away into a private pension now for when you retire. You’d still have 10-15 years to make a reasonable sum to go with your state pension.
The best way to make a start is to talk to a financial adviser.
If you can’t afford one, then using a money management calculator can help you plan your financial future. It can help you work out how much you can put away.
I’ve Heard About Investing, How Do I Start Doing That?
Investing can be a great way to build savings for retirement, even later in life. Here are some tips to get started:
⦁ Learn to trade and invest in stocks and cryptos. Develop an investing plan based on your goals, time horizon, and risk tolerance. Consider a target date retirement fund if you want a hands-off approach.
⦁ Invest regularly from each paycheck, even small amounts. Dollar-cost averaging helps lower risk by smoothing out the highs and lows.
⦁ Diversify your investments across stocks, bonds, cryptos, etc. to reduce overall portfolio risk.
The key is to start now, take it slow, learn as you go, and stay invested for the long run. Investing wisely can help grow your wealth even later in life.
Conclusion
Many adults aged 55 and over have inadequate or no pension savings. This puts them at risk of financial hardship in retirement. The good news is, it’s not too late to start saving. If you’re in this situation, here are some tips:
⦁ Check if you have any forgotten pension pots from previous jobs
⦁ Start contributing to a private pension now, even small amounts add up over time
⦁ Consider investing – you can get better returns than standard savings accounts
⦁ Get guidance from a financial advisor or money management tools
⦁ Make a plan and take action before it’s too late to build retirement savings
The key is to start saving something towards retirement income now. With some smart planning, investing, and professional guidance, you can build a pension even starting in your 50s or 60s. Don’t delay – make a plan and take control of your financial future.
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*Article data courtesy of Unbiased and Opinium survey
Please note: All information in this article is the opinion of Investment Mastery and not to be taken or used as financial or investment advice. You must always do your own research before investing.
