Beginners’ Guides

Beginners’ guide to pensions and retirement

Check List

Help - I haven’t started planning for my retirement, what can I do?

It’s never too late to start planning for your retirement, as something is generally better than nothing. Take financial advice before you sign up to a new pension.

In your 20s: The earlier you can start the better, as your money will have the maximum chance to grow. Consider paying into any occupational pension on offer, as your employer may pay in contributions on your behalf. If no work related scheme is available you could look at an individual pension. Consider investing the maximum you can afford – though it’s worth noting you can’t normally touch the money until you are at least aged 55.

Make sure you also have adequate and accessible emergency savings.

In your 30s: As you’re nearer retirement age, you’re likely to have to put more into a pension than someone starting in their 20s to achieve the same income. But you still have plenty of time to build up a decent pension. Consider paying into any occupational pension on offer, as your employer may pay in contributions on your behalf. If no work related scheme is available you could look at an individual pension. Consider investing the maximum you can afford – though it’s worth noting you can’t normally touch the money until you are at least aged 55.

Make sure you also have adequate and accessible emergency savings.
In your 40s: If you haven’t started retirement planning yet, you’ll need to give some serious thought as to how much you should save. A financial adviser can help. Consider paying into any occupational pension on offer, as your employer may pay in contributions on your behalf. If no work related scheme is available you could look at an individual pension. You may also want to consider alternative savings plans to run alongside. Investing in an Individual Savings Account (ISA) is tax efficient. Unlike a pension, tax relief is not available on your contributions, but any savings growth can be withdrawn free from personal tax.

Once you’ve invested the maximum allowed in an ISA, consider the other savings and investment options available to you. Again, a financial adviser can help you to choose the most suitable investments for you.

You can find out more about ISAs in our investment guide.

In your 50s: Time may be running out to fund a decent retirement through a pension, but you shouldn’t forget how tax efficient a pension can be. Consider paying into any occupational pension on offer, as your employer may pay in contribution(s) on your behalf. If no work related scheme is available you could look at an individual pension. You may also want to consider alternative savings plans to run alongside. Investing in an Individual Savings Account (ISA) is tax efficient. Unlike a pension, tax relief is not available on your contributions, but any savings growth can be withdrawn free from personal tax. Once you’ve invested the maximum allowed in an ISA, consider the other savings and investment options available to you. Again, a financial adviser can help you to choose the most suitable investments for you.

In your 60s: If you haven’t put anything aside for your pension by the time you reach your 60s, then your options are probably limited. If you intend to delay your retirement to your late 60s, then you may still consider a pension to be an option.

However other types of savings plans may provide a more flexible alternative. Investing in an Individual Savings Account (ISA) is tax efficient. Unlike a pension, tax relief is not available on your contributions, but any savings growth can be withdrawn free from personal tax.

Other savings and investments can provide growth potential, or income potential. You should speak to a financial adviser to help you determine what are the most appropriate options for your circumstances.

Please bear in mind

The information on this page is based on current tax rules, which may change in the future.

You should always take financial advice before making any decisions about how to invest for your pension.

Read our guide about Choosing a Financial Adviser or find an Independent Financial Adviser near you.

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