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No savings at 50? I think these 2 cheap UK shares can help you retire rich

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Buying UK shares after the recent stock market crash may not seem to be an attractive proposition for someone who is seeking to start investing for retirement at age 50.

However, while there could be further uncertainty ahead for indexes such as the FTSE 100 and FTSE 250, over the long run their track records suggest that they are likely to recover.

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As such, now could be the right time for long-term investors of any age to buy a diverse range of shares. Stocks such as the two companies below could deliver improving returns that help to improve your financial prospects in retirement.

A diversified mining stock

While many UK shares have declined heavily in 2020, diversified mining business BHP (LSE: BHP) is not among them. Its share price is down by around 2% since the start of the year. This is a significantly better performance than the FTSE 100’s 18% drop.

The company recently reported that a large proportion of its operations have so far been unaffected by recent events. It has maintained its low costs relative to other mining companies. This could provide it with a competitive advantage should demand for a wide range of commodities come under pressure.

Furthermore, BHP has a solid balance sheet compared to many of its peers. This may allow it to not only overcome short-term risks caused by a global economic slowdown, but to capitalise on them through potential acquisitions.

Although the stock faces an uncertain future, like many UK shares, it appears to have a sound business model through which to deliver improving capital returns in the long run. As such, buying a slice of it today while it offers a forward dividend yield of 4.7% could prove to be a sound move.

Strong recovery potential among UK shares?

Banking stocks such as Lloyds (LSE: LLOY) have been some of the major fallers in 2020 among UK shares. Its stock price is down by over 50% year-to-date, with an uncertain economic outlook weighing on investor sentiment. This trend could continue in the short run as lower demand for new loans in a weak period of economic growth may weigh on its financial prospects.

Despite this, the strategy being employed by the bank could lead to improving financial performance over the long run. For example, it has launched a new financial planning service, and is seeking to cross-sell its retirement products to existing banking customers. Furthermore, the business is investing in its multichannel strategy, which could differentiate it from sector peers in what is a very competitive marketplace.

Of course, a new CEO at Lloyds in 2021 could cause investor sentiment towards the business to come under pressure. However, with it having a low valuation relative to its historic levels, the bank could outperform many UK shares to deliver impressive total returns in the coming years.

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Peter Stephens owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned 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.

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