Are you sorted for a decent retirement? What happens when your pension planning has slipped through the cracks?

Retirement can seem like a dim and distant event, something you’re too busy being young and fun to worry about. Until one day you’re not quite so young, even if you’re still a hoot. And suddenly you might find yourself wondering if you can still get a pension if you’re over 50.

Perhaps circumstances have conspired against you, and you’re currently left facing a future with next to nothing to fund your golden years. Apart from the full state pension, which currently stands at a less-than-princely £203.85 per week.

To make it harder for many people, especially those who have worked abroad or moved to the UK later in their careers, a 2016 rule change means you need to have made 35 years of National Insurance contributions to receive the full amount. If you have a shortfall, extra voluntary contributions can bring you up to 35 years and, if you have not been working because of illness, disability or caring responsibilities, you can apply for pension credits.

Gloria and Chris’s stories

For 60-year-old Gloria, pensions had always been “something on a distant and uninteresting horizon, the assumption being that I would be dead before I needed it.” With just a small preserved pension from a short stint in the military, she says relying on the state pension “promises a significant change in lifestyle”, while prompting “an unusual interest in government threats to mess with the state pension triple lock.”

“My only saving grace is my two-bedroom cottage – selling it for the vastly inflated prices London houses attract might save my arse, but that will mean leaving city life behind,” says Gloria. “I like my urban lifestyle and culture. But it may have to be sacrificed to save me from living out my final days with the heating off, taking a weekly shower, and a daily value meal.”

…a pension had always been “something on a distant and uninteresting horizon, the assumption being that I would be dead before I needed it.”

Chris, 57, is worried about her retirement because of circumstances that have affected her ability to put aside a healthy pension pot. Such as getting divorced, sporadic maintenance payments from her ex-husband, and moving from the civil service to the private sector.

In the past five years, she has made some salary sacrifice contributions to top up her pot. But she remortgaged her house to help her children put down deposits on their own homes. “This was mainly because my eldest was living in an horrendous rental. So that has kiboshed me for another year or two.”

“I’m not sure I’ll be able to have a luxurious retirement, particularly as the stock market is dire,” she says. “The house is mostly sound, although I’m one of those with an ancient house that can’t be insulated.”

Read more: Might you have a pension you’ve forgotten about?

The good-ish news

There is good news for Gloria, Chris and the many others in similar situations though. According to independent financial advisor, Keren Bobker, “it is never too late to plan for your future. And being in your 50s is not that old, although time is no longer on your side.”

“It’s never too late to prepare for retirement. But exactly what that looks like might be a bit different when you’re 50+,” agrees financial coach, May Fairweather. “Much of the conventional advice assumes that you will have several decades for investments to build value, and that your income will go up over time. When you’ve got less time before you’ll need your retirement assets, you might need a slightly different approach.”

The reality is that you cannot pay in just £100 per month for 20 years, a total of £24,000, and expect to receive a large income in retirement

Keren has a reality check for people who are running out of working years before retirement: “The reality is that you cannot pay in just £100 per month for 20 years, a total of £24,000, and expect to receive a large income in retirement. You have to save and invest consistently, in decent amounts, in order to build up a good retirement fund.”

If the clock is starting to run down, Keren suggests a range of options. These include the good old cash savings account, where interest is payable. Rates on these accounts have risen in the past year or so. Tax-efficient ISAs are another alternative to pensions.

“ISAs are popular as they can be easily accessed, have no restrictions on how you draw from them and you can contribute small amounts. The annual limit is now £20,000 so it is possible to save significant amounts over time,” she explains. “Be aware, however, that ISA funds form part of your estate for inheritance tax purposes. Whereas a pension does not.”

What about private pensions?

Keren says it can be beneficial to put money into a pension plan now, depending on how long someone has until retirement, the amount of accessible cash to invest and their personal tax rate.

“Individuals can benefit from tax relief on their contributions at their highest rate of personal tax – within various limits,” Keren says. “Contribution levels have been restricted in recent years, but someone who pays tax at 40% could potentially receive 40% tax relief on pension contributions.”

For example, personal contributions are paid net of basic rate tax, so £80 is invested as £100. A higher rate taxpayer can claim back a further £20 on at least part of their contributions through their annual self-assessment return.

What else can I do?

Put simply, your options depend on your personal situation. Keren says if you have cash in the bank, there are “always be options for investment. Based on amounts, their family situation, life expectancy, appetite for risk.”

“Do avoid risky investments if you are not in a position to lose money – they are rarely worth the risk,” she warns. “The basic principle is that saving money matters. So look at your budget to see what you can do to help to help future you. Some smart money management is always a good idea. In some cases, for property owners, downsizing may be an option. Or maybe there are other lifestyle changes that can be made.”

Other benefits

As well as topping up National Insurance contributions to become eligible for the full state pension, May says you could be eligible for other benefits. So it is worth speaking to Citizens Advice or Age UK for a free entitlement check.

“If you’re helping out with childcare for the grandchildren, or you have done since 2011, check whether you could claim Specified Adult Childcare Credits,” says May. “This is an alternative to paying to fill National Insurance gaps. But make sure you talk to the children’s parents first as it could affect their own National Insurance record.”

“Think creatively about ways you can either cut costs or split them with others,” May recommends. “Living alone is more expensive. Some older people are choosing to live with friends to split costs – and that has mental health benefits too.”

To get a clear idea of exactly how retirement-ready you are, there are free online tools that can help too. For example, Pension Buddy has a Retirement Health Check that does the calculations for you.

Work out how you can best prepare for a retirement that will hopefully be comfortable. Not just that, but still have fun!