If you find yourself at 60 or over without any savings for retirement, there’s a lot you can do to improve things. I’d start by finding out where you stand with regard to the State Pension. If you are 60 now you’ll qualify for the new State Pension when you reach the government’s State Pension Age, and you can check what age that will be for you by following this link to the gov.uk website.
At the moment, the full new State Pension is £8,546 per year, but to get the full payment you need to have paid at least 35 qualifying years of National Insurance (NI) payments.
You can get a forecast on the government website to see where you stand with regard to NI payments you’ve made and how much State Pension you are likely to get. There’s also advice on the government website about making top-up NI payments and about getting NI credits when you can’t pay the contributions yourself.
Start saving right now. Here’s how
Next, I reckon you should save as much as you can starting right now. Even at its full amount, the new State Pension isn’t much to live on. So I’d recommend looking at your lifestyle to see where you can trim expenditure in order to save regular money each month between now and when you retire. Getting on top of electricity, gas, broadband, TV subscription, mobile phone and other bills could be a good start in order to make sure you are always on the best deal with the best supplier you can find. You won’t suffer a reduction in lifestyle, but you could save pounds each month and all for the small effort of switching suppliers maybe once a year.
My Foolish colleague Roland Head recently punched out an article with some other money-saving and money-generating ideas, such as downsizing your home or renting out a room within it. Indeed, I’m sure that if you get creative, you’ll think of lots of ways to generate additional income from your assets, either by using them or selling them, and ways to save money that you are currently spending.
Little interest increases make big differences in the end
The all-important goal is to save regularly each month as a priority. But I think it’s important that you don’t take big risks with the money you accumulate because you don’t have the luxury of much time to recover from investing set-backs. So I’d look at high-rate monthly savings accounts, which some banks offer for existing customers (you can always switch to them to get it), and I’d consider fixed-rate savings bonds, which require you to lock up the money in the account for a few years to get the higher interest rate.
Small increases in the interest you earn in savings bonds and savings accounts add up to big changes in the amount of money you can compound your savings into over several years. It’s time to roll your sleeves up and hunt down the best interest rates you can, and I’d recommend using the comparison websites such as moneysupermarket.com to do that.
Finally, if you manage to save enough each month, I’d consider investing some on the stock market, which can be a great compounder of money over time.
