Worried your pension might not meet your needs? You’re not alone; many people feel the same way.
A survey by BlackRock, reported by The Financial Times, indicated that 75% of pension savers in the UK think they are not saving enough for a comfortable retirement. This is the lowest level of confidence in seven years.
This situation is a warning sign. Given that even after years of saving, you might still face challenges like rising costs of living, unstable markets, and even longer life expectancies.
The good news is that if you’re over 50, it’s not too late to make changes.
This article will explore the reasons behind this issue and the steps you can take now to improve your situation. Let’s start.
What’s Behind the Drop in Pension Confidence
BlackRock’s recent report highlights a worrying situation for pension savers in the UK. Only 25% of those surveyed feel confident that they’ll have enough money for a decent retirement. This means that three out of four savers are unsure despite being part of defined-contribution (DC) plans intended to help them save and grow their funds over time.
The report shows that this lack of confidence has grown majorly since 2017.
What are The Big Worries Keeping Savers Up at Night
What is causing all this uncertainty?
- Market Volatility: Recent years have been rocky for investments. Many people, especially those near retirement, are worried about the economy.
- Rising Longevity: The good news is that we are living longer. The downside is that your retirement savings need to last longer than for previous generations.
- Inflation and Cost of Living: Prices have gone up, but pensions haven’t kept pace. Many worry that their money won’t last.
- Under-Saving in Early Years: A late start or irregular savings in earlier years makes many feel they need to catch up quickly.
What Over-50s Can Do Right Now
Here are some steps that over 50s can do right now:
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Start with a Clear Pension Health Check
It’s challenging to fix what you haven’t looked at. Take a moment to review your current pension situation.
Start by understanding where you stand. A recent study shows that 15.3 million people in the UK could face pension poverty in 2025. This highlights why it’s important to check your retirement savings regularly. A pension health assessment is vital, not just optional.
Find out when you’ll qualify for your state pension. Review all your pension funds and use a calculator to estimate your expected income. A quick look can provide valuable insights.
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Boost Contributions While You Still Can
As you reach your 50s, even a few additional years of higher contributions can make a difference. If your finances allow, increase the percentage you put into your pension.
Many employers offer automatic increases for contributions. Also, think about tax relief. If you have already reached your yearly contribution limit in the past, you can just use carry-forward options.
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Explore Income Options Beyond Your Pension
Your pension alone won’t cover all your retirement income. Here are some other options to help secure your future:
- ISAs
- Investments that pay dividends
- Part-time or freelance work
- Income from renting property
Every additional source of income strengthens your long-term financial plans.
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Understand and Use Target-Date and Lifestyle Funds
These investment options help reduce risk as you get closer to retirement.
Target-date funds gradually shift your investments from higher-risk assets to safer ones. Lifestyle strategies work similarly by automatically managing risk on your behalf.
By 2025, over 80% of UK employees are expected to be saving for retirement through a pension plan. However, many still risk not having enough money for retirement due to poor investment options and lack of active planning risks.
Using target-date or lifestyle funds helps financial savers align their investments with their retirement goals. These funds automatically adjust risk levels, making them ideal for people who want an easier way to plan for their financial future.
How You Can Still Improve Your Retirement
You Have More Control Than You Think
Even if retirement feels close, small changes can make a big difference. Re-evaluating your investments or adding a little more to your savings can boost your future income.
You don’t always have to make drastic shifts. The more careful you’re in your fifties, the better options you’ll have later on.
The Value of Personalised Financial Advice
If you’re unsure about what to do next, seeking expert advice can be helpful. Speak with a licensed advisor. They can create a personalised plan to help you use your resources better and avoid costly mistakes.
Further Reading and Tools
- Guide to defined contribution pensions (GOV.UK)
- Free pension calculators and eligibility checkers (MoneyHelper)
- Personal finance advice from PMW Financial Advisors
- Upcoming pensions review (GOV.UK)
Conclusion
Worrying about your pension is normal, but it doesn’t mean the end of the story. The BlackRock data shows where you stand, but it doesn’t decide your future. If you’re over 50, you can still make smart changes.
Start by reviewing your pension. Evaluate your contributions, consider your retirement goals, and explore ways to boost your income, such as downsizing your home or taking on a part-time job. Seeking financial advice can be particularly helpful when things feel overwhelming.
Retirement does not have to be uncertain. By taking the proper steps, it can be a time you look forward to, full of freedom, safety, and peace.