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No retirement savings and running out of time? Here’s what to do

How old are you — 50, 60? Have you failed to put away any savings or investments to help fund your old age?

If you carry on working full time until you retire, without doing anything about it, you could face a pretty severe change in your standard of living. You may suddenly find yourself having to live on the State Pension of a few pennies over £164 per week. And you get that only if you qualify for the full pension, which many don’t.

What should you do?

I’d say the first thing is to adjust your standard of living now, and do it gradually rather than facing a hit all at once. That way you should be able reduce your current expenses and stash some cash away to provide a bit extra for your retirement days.

On average, British workers spend £6 per day on lunch, adding up to £30 per week. I’m sure you could easily make your own for £10 per week, saving £20 — and that’s not far under £1,000 per average working year. For every week you save that £20, one week’s future State Pension can be boosted by 12%.

Out for a meal once per week? £30 isn’t excessive even here in my native and cheap Liverpool. Same again for a night out in the pub? Add those up, and we already have an extra £80, to boost a week’s pension by nearly 50% to £244.


If you drive a car, they cost a small fortune. Public transport can be very expensive too. Even buying an annual travel pass in London can easily end up costing you £40 or £50 per week. How about cycling and saving the cash, and helping with your fitness into the bargain?

That could be another £50 per week saved for a future pension week, and we’re already up to £294 per week.

These are just a few things, and I’m sure every one of us could think of ways to cut down on what we spend. And how about downsizing your home earlier than planned, and freeing up some capital to invest? It might hurt now, but it should help lessen a greater hurt later on.


Another thing to seriously consider is to carry on working after your qualifying retirement age (either in your current job or something else). If it’s full-time, you could defer taking your State Pension and get higher payments later. Or work part-time to top up your pension. Or perhaps even both. I know I intend to carry on working as long as I find what I do rewarding.

You’d reap two benefits. Firstly the cash one, as with this combined approach you’d save money and would carry on earning for longer. And your retirement would come stepwise, as a kind of phased withdrawal, rather than a big jump (which comes as a shock to many).


What do you do with any cash you’re saving or any extra earnings? If you have at least a decade to go, I’d say put it into a Stocks & Shares ISA, buying top FTSE 100 shares paying steady dividends. And then as the years tick past, gradually transfer portions to the highest interest savings account you can find.

Financial Independence, Retire Early

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Views expressed in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.