No savings at 50? I’d invest in UK shares to add to the State Pension and retire rich!

Approaching retirement with nothing in the bank? Here’s how investing in UK shares can help Britons enjoy a comfortable retirement!

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The high cost of living in modern Britain means it can be hard to save or invest for retirement. Especially for those who’ve little-to-nothing stashed away for your later years.

This is a whopping shame considering that citizens don’t have to invest vast sums to build a comfortable retirement with UK shares.

According to Lloyds, a third of Britons don’t regularly save any money for their retirement or for a rainy day. Those nearing or in retirement are the worst culprits when it comes to NOT managing their money too. Around one in five over-55s told the FTSE 100 bank they don’t plan their finances at all.

This is a particularly damaging situation, given the inadequacies of the State Pension. Pensioner poverty in the UK has ballooned over the past decade as benefits rises have failed to keep up with the soaring cost of social care. The rumoured scrapping of the ‘triple lock’ pension increase system following Covid-19 adds further reason for Britons to be concerned.

Protecting your retirement with UK shares

The scourge of pensioner poverty is a trap that many of us can avoid. Obviously, the earlier you grasp the nettle and begin retirement planning, the more time you have to build a handsome warchest. But the returns to by made by investing in UK shares means it’s never too late to begin.

Image of person checking their shares portfolio on mobile phone and computer

Let’s say you’re 50 years of age with nothing in the way of savings or investments, and plan to buy and then hold your UK shares for a minimum of 10 years. By the time you reach the State Pension age of 67 you can expect, with an investment of £600 a month, to have built a hefty nest egg of between £251,788 and £305,071.

Buying after the stock market crash

Those figures are based on data showing that long-term investors enjoy an average yearly return of 8-10%. But those who buy UK shares today have a chance to make even mightier returns over the next decade.

This is because the 2020 stock market crash has left stacks of top-quality stocks trading at rock-bottom prices. These will rebound in price as the economic recovery really kicks in, corporate profits recover, and market confidence comes flooding back.

Becoming an ISA millionaire

This very tactic made hundreds (if not thousands) of Stocks and Shares ISA investors million-pound shares portfolios in the last decade. They bought cheap UK shares following the 2007-2008 financial crisis and watched them boom in value during the 2010s.

I’m not sitting on my hands and hoping the State Pension will support me in retirement. This is clearly a recipe of disaster as thousands of cash-strapped pensioners will attest. I’m carrying on buying UK shares in my ISA to get rich during the inevitable economic upturn.

And The Motley Fool and its huge library of exclusive reports should help me on my quest.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. 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.

More on Investing Articles

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

With an 8% dividend yield, I think this undervalued FTSE stock is a no-brainer buy

With an impressive yield and good track record of payments, Mark David Hartley is considering adding this promising FTSE share…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

£9,500 in savings? Here’s how I’d try to turn that into £1,809 a month of passive income

Investing a relatively small amount into high-yielding stocks and reinvesting the dividends paid can generate significant passive income over time.

Read more »

Businesswoman analyses profitability of working company with digital virtual screen
Investing Articles

Dividend star Legal & General’s share price is still marked down, so should I buy more?

Legal & General’s share price looks very undervalued against its peers. But it pays an 8%+ dividend yield, and has…

Read more »

Investing Articles

Dividend shares: 1 FTSE 100 stock to consider buying for chunky shareholder income

This company’s ‘clean’ dividend record looks attractive to me and I’d consider buying some of the shares to hold long…

Read more »

Investing Articles

3 of my top FTSE 250 stocks to consider buying before April

Buying undervalued UK shares can be a great way to generate long-term wealth. Here, Royston Wild reveals a handful on…

Read more »

Ice cube tray filled with ice cubes and three loose ice cubes against dark wood.
Investing Articles

Just released: our 3 top income-focused stocks to buy before April [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due…

Read more »

Investing Articles

Is this the best chance to buy cheap FTSE 100 shares in a generation?

I want to buy shares when they're cheap, and sell... never, just keep taking the dividends. And the FTSE 100…

Read more »

Man putting his card into an ATM machine while his son sits in a stroller beside him.
Investing Articles

Could NatWest shares be 2024’s number one buy for passive income?

For those of us looking to earn some long-term passive income, how does NatWest's 7% dividend yield sound? It sounds…

Read more »