This article was last updated on 20/07/2023
They say 50 is the new 40, and you’re only as old as you feel. Take Noel Gallagher for instance – he’s in his 50s now and he’s still throwing parties that are ‘better then Glastonbury’.
As dull as it sounds though, it’s also an age when you’ve got to start thinking about your pension sensibly. Your 50s are a crucial decade when it comes to your retirement, especially if you haven’t started thinking about it already.
So, where you should be by now? And how can you fix things if you’ve fallen behind?
The average pension pot at 50
Research from insurance company LV= found that Brits aged 45-54 have an average pension pot worth £71,342. Our own, recent study of nearly 200,000 PensionBee customers, showed that males and females over 50 had an average pension pot of £43,954 and £23,962, respectively.
To put this into some context, a recent study by Which? suggests that a combined pot of £115,000 would give a couple a comfortable retirement if you opt to withdraw from your pension via drawdown. *Drawdown figures are based on a saver withdrawing all their money over 20 years from age 65, and assume investment growth at 3%, inflation at 1% and charges of 0.75%
So, what can you do to get your pension on track?
Firstly, consider finding and combining
A good place to start is to find out what you have hidden away. Almost half of those over the age of 50 admit they don’t know the value of their pension, thanks in part to the patchwork of old workplace pensions that they’ve left unclaimed.
Collating all of these old pensions and putting them into a single pot is an easy antidote to this, as it’ll clarify your pension position and make monitoring the performance of your funds a lot more straightforward.
We can do this for you at PensionBee - on average, it takes up to 12 weeks to locate and transfer your old pensions - or alternatively you can use the government’s free Pension Tracing Service to track down those old pensions. Discover more about finding and transferring pensions in our dedicated section.
Secondly, put a saving plan in place
Once you’re clearer on your pension position, it’s time to start to thinking about the future.
A smart place is to start is our pension calculator, as this can help you determine how much you’ll need to save between now and retirement. Simply set yourself a retirement goal based on the income you’d like to receive and the age you’d like to start receiving it. Then input your current age, and details of any pensions and savings already in place, to discover how much you’ll need to contribute each month to reach your target.
Thirdly, stay positive
If the size of your pension isn’t quite where you’d like it to be there’s still time to make a positive impact. No matter what your age, it’s never too late to come up with a plan and start saving – even if you were to start saving from ground zero aged 50. It’ll take a bit more effort, but it’s by no means impossible!
Above all else don’t panic, as it’s suprising what’s possible. Start by seeing how some small switches could make help you put an extra £500 a month in your pension, and make you sure you avoid missing out on ways to boost your State Pension.
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.