Pensions in your 50s
In your 50s you may be lucky enough to see your disposable income start to increase – any offspring tend to leave home and you get closer to paying down debts such as your mortgage.
This could also be your last decade of pension saving before you start to take an income, so it's crucial to take steps to make sure you're on course to meet your goals.
Build up your pension pot
- If your disposable income rises, you should think about increasing your pension contributions too – especially if your employer will match the contributions you make.
- Get a State Pension forecast to check what you're on track to receive. If you haven't built up enough National Insurance contributions, you can usually make additional contributions at this stage.
- Use our pension calculator to estimate what you can expect from your pension pot on retirement and consider getting a full pension review from a financial adviser
- Check that the investment strategy used by your pension fund is still appropriate for your needs. As you get closer to retirement, you may want to start moving towards lower-risk pension investments.
If you’re not on course to meeting your retirement goals, now is the time to take stock and come up with a plan to get yourself back on track.
Consider your retirement income options
From the age of 55 you can usually access your pension pot. If you do, your main options are:
- Withdraw 25% of your pension pot as a tax-free lump sum OR
- Make a series of smaller withdrawals over time, the first 25% of each being tax-free
- Use the remaining money to purchase an annuity giving you a regular income for life OR
- Leave it invested and draw an income from it at intervals that suit you – known as drawdown.
Remember that the earlier you start to draw an income from your pension, the longer it will have to last. If you're thinking about drawing an income already, a financial adviser can help you assess whether you will have enough to last you throughout retirement.
The approach that suits you will depend on your circumstances and goals, so it's important to start planning early.
A financial adviser can help you plan to ensure that your savings will match your expectations for retirement.
Last updated: 04 June 2015