Is it ever too late to start a pension?

A pension can give you an income when you retire, but how much will depend on what you contribute during your working life. Here are your pension options, even if you have no pension at 50.

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Pensions are long term investments. You may get back less than you originally paid in because your capital is not guaranteed and charges may apply.

When should you start a pension?

It’s best to start a pension as early as you can, to maximise your pensions savings. But, if you haven’t started one, don’t panic. You can still build a pension income even if you start a pension later in life.

If you contribute from an early age, you’ll have a longer period of time to build your pension fund. This could give you a better income when you retire.

If you don’t start contributing until later in life, you’ll still be able to add funds to your pension fund each year, tax free. You could save the equivalent of your salary in your pension annually. Alternatively, you’ll be able to add £3,600 in each year. You can go with whichever is higher. It’s a tax-efficient way to save money

If you’re worried you won’t have enough income to live on when you retire, speak to an independent financial adviser to discuss your options.

Could you afford to retire?

You should think about the financial position you could be in when you retire. Ask yourself the questions:

  • What outgoings will you have? Will you still be paying for a mortgage or rent?

  • What lifestyle will you want? Will you explore the world, improve your home or just live a quiet life?

  • Will you want to help your children and grandchildren out financially?

If there are things you’ll want to do in your retirement, you’ll need money. That means you’ll need a plan of action.

It’s important to try to clear your debts before you retire. Otherwise you could see your retirement income stretched, and you could default on your repayments.

How much money do you need in your retirement?

This will depend on your circumstances and plans. Think about how much money you’ll need in order to afford a comfortable lifestyle when you retire. 


  • What income do you want when you retire? For example, you might know that you need at least £12,000 a year

  • How much can you afford to save each month? For example, you might have £100 spare a month which you could save.

How much will my pension give me each month?

You can use one of the following pension calculators online to predict how much income you’ll get from your pension. The calculations are based on how much you contribute:

Unfortunately, you may find the amount you can afford to save each month won’t give you the retirement income you want.

It’s never too late to start saving for your retirement. But, the longer you leave it, the more you will need to invest to build the income you want.

What pension could you get?

State Pension

The amount you get from your State Pension will depend on how much you’ve paid in National Insurance.

If you’ve missed any National Insurance payments in the past, you can make a lump sum payment to make up any shortfall.

You get your State Pension as an income each month when you reach State Pension age.

Many people will have more than one pension, as State Pension isn’t always enough to live off.

Here’s more information on the State Pension.

Workplace pension

If you work for an employer, they may have a workplace pension scheme that you could join.

Some employers also contribute to your workplace pension. It’s worth asking your manager or HR team for more information if they haven’t talked to you about it upfront.

You may have already been automatically enrolled onto your employer's pension. You can read our guide to find out whether auto enrolment applies to you.

Here’s more information on workplace pensions.

Self-Invested Personal Pension (SIPP)

You can open this type of pension without any help from an independent financial adviser. A SIPP is completely self managed.

You can invest as much as you like into this type of pension. It’ll pay out when you reach your retirement age, just like a workplace pension does.

Find out more about how SIPPs work here.

Is it worth starting a pension at 50?

Many people who've reached the age of 50 and haven’t yet started a pension assume it’s too late to start one now.

But, if you can start putting away cash into a pension fund now, it can still be one of the best ways to invest for your retirement.

Even if you have no pension at 50, going by the current State Pension age of 67, you still have 17 years left to invest. A lot can be done in that time.

Why invest in a pension at 50?

The main advantage of using a pension fund over a stocks and share ISA is that the Government gives tax relief on money paid into your pension.

HMRC will credit the income tax you pay into your pension each year, up to certain limits.

In the 2021/22 tax year, you can get tax relief on private pension contributions worth up to 100% of your annual earnings or £40,000, whichever is lower. You of course have to be a UK taxpayer to benefit from this.

You get the tax relief automatically if your:

  • employer takes workplace pension contributions out of your pay before deducting Income Tax 

  • rate of Income Tax is 20% – your pension provider will claim it as tax relief and add it to your pension pot.

Will my children pay inheritance tax on my pension when I die?

One of the very good things about pensions is that they’re not subject to inheritance tax when you die. This means your pension can be passed on to children and grandchildren without them having to pay inheritance tax on it. The same can’t be said for property, for example. So opening a pension can be a good way of helping out your family.

If you die before you reach 75, your beneficiary can draw on the money as they choose without paying income tax. However, if you’re over 75 when you die, they will have to pay income tax on withdrawals. This will be charged at the highest rate of income tax that they pay. 

How else can I boost my savings for retirement?

Having a pension is great, but if you want to boost your savings in preparation for retirement, there are some other things you could do to help.

Here are some ideas:

  • Work past retirement age. The longer you work for, the longer you can save into your pension pot. You’ll also benefit from a higher State Pension if you do this. Or, perhaps you could consider a phased retirement, gradually transitioning to a full retirement over a number of years.

  • Create an extra source of income. You could get a part-time job. Or you could get a lodger if you have the space. Alternatively, you could set up your own sideline business doing something you enjoy. This would give you something to focus on in your retirement, which you’re passionate about and which brings in money.

  • Find your old pensions. You may have had a series of pensions over the course of your working life. Finding these could be very useful in terms of boosting your retirement funds.

  • Speak to an independent financial adviser. They’ll be able to discuss your options with you and help you to make a plan.

You can help ensure you have the retirement you want by finding the best personal pension plan to make your money work as hard as it can.