Investor Clinic: Help! I'm in my 50's and I havent started a pension


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A 52 year old man has yet to start saving for his retirement, where does he start? how much does he need to save? where should he put it? That’s the quandary Robbie and Tina are in and they need your help. We’re frequently told that as a nation we’re not saving enough towards our…


There are a couple of assumptions I just need to challenge here Robbie & Tina to begin with. If you have no pension at present, spend all your money each month and your attitude to risk is only 1-2 out of 10, and you want to retire at age 65 in 13 years time - it just 'ain’t gonna happen mate!

In indicating you are 1-2 risk level, that means investing in cash. which earns nothing, and never has been able to keep up with equities long term.

In any case, i challenge your view that you’re low risk - what’s low risk about spending all your money each month and not starting a pension plan until you’re age 52! I’d put that in the very high risk category.

Also, what you need to consider is it takes a long time for money to grow which is why your start early. You need to take more risk, but calculated risk because the bigger risk you face is that you won’t have enough money in retirement.

Selling your house and moving out of London to somewhere cheaper is an option but even then, you won’t have enough money to last all your days.

I think you’re probably looking at an age 70 retirement date, maybe older.

If you can cut back on some of your expenditure and start saving serous amount of money you might just get there.

If you saved £1,200 per month, the Government would make it up to £1,500, which is £18k per year, or £234,000 over 13 years before achieving any growth.


The Money Advice Service provides pension calculators you can and should play around with
Here’s some of the results I got from playing around and assuming your birthday is December, contributing £12,00 per month net, £1,500 gross.
At your preferred retirement age of 65 your total pension pot size could be £249,291. If you take a tax free lump sum of 25% of your total pension pot it will give you a cash payment of £62,323.

This will leave a remainder of £186,968 in your pension pot which could provide you an income of: £9,622

If you don’t take tax free (TFC) cash it’ll be £12,829 p.a…

if you add £200k from your house sale, and no TCF you could have £495,736 in your pension pot which could provide you an income of: £25,512

If you delay retiring to age 68 the state pension kicks in then too:
You could have £316,798 in your pension pot which could provide you an income of: £17,712
plus state pension £8k
Including £200k from house sale - £575,824 in your pension pot which could provide you an income of: £32,193 + £8k

Also, your wife will have a pension too, you can contact the scheme administrators to request a quote.


I agree with all that @colinweasel has said Robbie and Tina. if you want to have enough money in retirement he has demonstrated there is a path but you will need to start saving a lot now.

I’d suggest a portfolio of investment trusts and funds that you contribute to monthly.

It would be useful if you could let us know what your reaction to this is so far? Then we could maybe begin to suggest a portfolio for you.

The Buy list page on this site has some reasonable suggestions.


Thanks for the feedback folks, alot to think about there.

To be honest i was thinking of stretching myself to maybe £400 or £500 a month, not £12-1500.

I think what you folks don’t get is that for us near mortals, investing in the stock market is like going to the casino or playing Russian roulette. Can I really afford to be taking such risk with my money?

I know I’ve probably left it for longer than I should have but does that really mean I need to risk pissing it all up the wall now, if you pardon my French.

I had hoped someone might have a suggestion of how we can get there with less risky investments.

If you really think we need to save more than £500 per month then i will have to look at that but I’d rather not risk it too much.


@RobbieM You can invest your money anywhere you like but if you want to make the returns you need you need to take some risk. Like @colinweasel said you have been taking an awful lot of risk anyway, and you will be compounding that risk by investing inc ash because it earns diddly squat.

There is a risk that investing in funds or investment trusts won’t work out for you but history tells us that if you have a long term investments horizon, and you do, should are likely to do well out of it.

As you get closer to your planned retirement date however, that’s when savers tend to start moving to cash or bonds because stock markets can be volatile short term. Usually that be the last five years but if you want to retire at 65 then that only leaves 8 years to grow your wealth. Not long at all.

If you really want to retire early start saving £2,000 per month gross now (that’s £1,600) net.


Given your risk profile, investment trusts might not be for you.

One potential safe option is to compare the interest rate on your mortgage with what you can get from cash ISA savings (probably ~2%). If your mortgage rate is higher then consider overpaying your mortgage and then when it is paid off reconsider your saving goals.

However if you are prepared to consider some risk, then it might be worth making some pension payments as you are probably a higher rate tax payer. paying the amount that is currently taxed at 40% would be quite tax efficient as you will be a standard rate tax payer in retirement.

Probably the lowest risk investment trust’s are well covered zero dividend preference shares that will give you a gross redemption yield of ~4%. However this level of growth is going to generate much of a return or a pension.

Other lower risk trusts are mainly in the Flexible Investment’ sector and you could consider
Capital Gearing, Personal Assets, RIT Capital Partners - though this sector has only returned 10% in total over the last 3 years and 65% over 7 years. The mangers of these trusts look for capital preservation

Realistically your current spending of £1000 on holidays and £2000 on leisure/eating out per month - won’t be covered by your pension, so I think you need to weigh up the benefits of enjoying life now vs after retirement.