Saving in your 60s

Life used to consist of three key stages: education, work, retirement. This is often no longer the case, as we’ve transitioned into a more flexible, multi-stage lifestyle. This gives you more options when it comes to when and how you want to retire.

1. Start by knowing your savings goals

With so many options to choose from, it’s particularly important to know your retirement savings goals. Whether you want to use your pension to fund home improvements, travel or study, you need to make sure you know how much you’ll need to save, and what that means for your spending in retirement.

Use our retirement saving guidelines to get an idea of how much you’ll need to save each year to fund your lifestyle in retirement. From there, you’ll be able to set yourself a savings target to work towards.

2. Find out what you’ve got saved

If you have savings in several pension plans – which is likely if you’ve changed jobs during your career – it's important to know where these are and how much is saved in them. This will allow you to get a good picture of your overall savings and investments.

You could also consider consolidating your pensions so that they're all in one place. You can read more about transferring your pensions here.

If you’re unsure of what you have, you can track down lost pensions with the Government’s Pension Tracing Service.

3. Check your retirement age

Check your retirement age in PlanViewer to make sure it reflects your current retirement goals and plans. 

It’s important to keep this up to date as it will affect your savings and investments. This is particularly important if you are invested in the default strategy which aims to preserve your pension fund by automatically moving your investments into lower risk funds as you get closer to your retirement age. So if you select a retirement age but continue to work beyond this, your investment growth could slow considerably due to the low risk of the funds. Likewise, if you retire earlier than the date you've selected, your pension pot could be invested in higher risk assets, leaving you open to greater market volatility.

Remember, the earlier you retire, the longer your savings will need to last. And the later you retire, the more time you spend earning a salary and potentially boosting your pension savings. 

4. Add a little more today

A small increase to your contributions now, can still make a difference because, when it comes to saving, the longer you can contribute, the longer your savings have to grow. Time is a powerful tool and continuous contributions can grow to a sizeable sum, thanks to the benefits of compounding.

You can keep your money invested during retirement to really make the most of longer-term savings. Remember, the value of your pension savings can go down as well as up so you may get back less than you have saved. 

5. Use your allowances

While there is no limit on the amount you can save into your pension each year, there is a limit on how much you can save into your pensions each tax year while still benefitting from tax relief. For most people, the standard annual allowance is £60,000 but for some, it could be as low as £10,000. You may also be able to ‘carry forward’ any unused allowances from the previous three tax years to make higher contributions, while still benefiting from Government tax relief.

Learn more about pension  tax allowances and remember that tax treatment depends on individual circumstances and pension and tax rules may change in the future.