—

17% of UK adults do not save for their retirement lives. A significant portion of Brits do not know how much they’ll get in state pensions.

This lack of knowledge can affect your retirement planning.

Let’s discuss some key findings from a research report and see how you can start saving for your retirement at 55 or above.

Key Findings

It’s alarming to find that around one-sixth of UK residents aged 55 or more have no retirement savings other than state pension plans at all and may have to turn to expensive products such as equity release, second mortgages or other short term loans to help supplement their income.

Also, one in five Brits does not have any retirement savings generally. Most of these non-contributors are non-working or self-employed.

Let’s take a glance at some key findings from a research report conducted by unbiased.co.uk.

17% of people in the UK have no retirement savings other than a state pension.
21% of people of all ages in the UK have no pension savings at all.
45% of Brits expect a state pension of at least £20,000 and 61% of people expect £10,000 in a state pension. The maximum state pension currently is £9,110.
60% of people with no work have zero savings for retirement while 24% of part-time workers haven’t saved anything for retirement.
24% of UK adults aged under 35 do not start retirement contributions.
Only 8% of full-time workers said they have no retirement savings.

These stats visibly show that non-working and part-time workers tend to not save for retirement. That’s why only 8% of full-time workers have no pension plans or retirement savings.

The age factor is also a concern. People nearing their retirement ages tend to save more when they realize insufficient savings for their post-retirement lives.

A Quarter of People over 55 Forget About Their Pension Contributions

Uncertainty about their pension contributions is another major concern for people in the UK.

The same research report from unbiased.co.uk revealed:

14% of people under 35 are unsure about their retirement contributions
21% of people between 35-54 are unaware of their pensions
24% of people aged above 55 do not know about their pension savings

One of the main reasons people forget about their total pension savings is the change of jobs throughout their careers.

Private employers have an auto-enrollment plan for pension contributions. So, it’s a good idea to check your pension accounts with previous employers first.

In rare cases, you may not have any pension scheme from your previous employer though.

Private v State Pension Savings

Also, a staggering number of people in the UK are unaware of the yearly state pension amounts. That’s another major reason why people don’t start retirement contributions early.

A recent research report conducted by LV showed that nearly 77% of UK people do not know how much is the state pension amount.

Similarly, a large number of people fail to understand the official retirement age, eligibility criteria, weekly pension payouts, and many other important information factors.

The ill-informed people about state pensions tend to contribute less to their private or employer-sponsored pension plans too.

How to Workout Your Retirement Savings?

The first step to take is to know your state pension information. Make yourself familiar with state pension eligibility, weekly payouts, retirement age, and the maximum yearly allowance.

Then, figure out how much you’d need to live a comfortable life post-retirement. It will depend on your current lifestyle as well as your goals for post-retirement life.

Then, use an online pension calculator to count in on the factors like compounding interest, tax consequences, minimum contributions, and contributions term.

You may need to revise your pension plans periodically to adjust for inflation and revised financial goals.

Is It Too Late to Start Contributing for Retirement at 55?

Unlike the common notion, it’s never too late to start saving for your retirement.

Even at 55, you are a decade away from your retirement age. Before you finalize a plan, double-check with the pension tracker to know if you had any pension plans from your employers over the years.

Your contributions to a pension plan grow tax-free. It means you’ll enjoy the compounding effect more than any other investment plan at this stage.

Although the pension contributions after 55 wouldn’t suffice your needs, it can be a good starting point to figure out your total needs post-retirement.

Maximize your pension contributions to maximize the benefits. Then, figure out the gap between your needs and actuals at this stage.

You can plan other moves like postponing your retirement, investing in high-yield securities, and savings from current expenses.

However, not saving for your retirement plans even at 55 is not worth considering. You’ll be better off with some savings than nothing when you retire.

—