Whether you’re in your 20s or 60s, we have some helpful tips to help you financially prepare for the future.
We won’t tell you how much you should be saving – everyone’s monthly budget is different. What really counts is what you choose to do with any money you’re able to put aside.
Here’s a checklist of what you could be doing now, depending on your age.
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How to plan for retirement in your 20s
How to plan for retirement in your 30s
How to plan for retirement in your 40s
The 20s decade is the age of financial freedom. It’s often the time when you step onto a career path and experience the power that comes with real earning (and spending) potential.
At this stage, retirement will probably feel a long way off. But the sooner you start saving, the better off you’ll be.
What you could be doing in your 20s:
Work out your monthly budget, so you know how much money you can save.
Make sure you’re enrolled in your workplace pension scheme and make the most of it, if your employer offers a scheme to match some or all of your pension contributions.
Whether you save or invest, you can start today with a small amount and keep adding to it. This way, you’ll soon be earning interest on your interest. The sooner you get into the habit of saving, the easier it will be.
The 20s mantra: watch that spending and save when you can.
The 30s decade is all about building on what you’ve started. And if you haven’t started yet, now is the time to do it.
Hopefully, you’ll be earning more because your salary has increased with your experience.
Keep an eye on your outgoings, including household bills, subscription services and other expenses. Make sure you’re not spending more than you can afford.
What you could be doing in your 30s:
Consider doing this every time you get a pay rise – before you even get the extra money, so you don’t miss it.
If eligible, you could save up to £20,000 this tax year in an ISA, and your returns will be free from UK income tax and capital gains tax. The value of any tax benefits mentioned will depend on your circumstances, and tax rules could change in the future.
Take a more active interest in your finances through online money management tools – or try our retirement lifestyle calculator.
The 30s mantra: it’s time to stash some cash.
The 40s decade is an age of big earning and spending potential. All being well, you could be at the peak of your career or supercharging it by starting your own business or stepping out in another direction.
But if you’re not where you want to be, it’s not too late to save for your retirement. Now is the time to take a long, hard look at how you manage your money, including any debts you may have.
You may also want to update your financial action plan.
What you could be doing in your 40s:
Use our retirement calculator to see whether you’re on track to achieve the lifestyle you want. Find out how much state pension you could get and see if you’re able to top up any gaps in your National Insurance contributions.
If you’re willing to take a little risk, investments – such as a ready-made portfolio – could be a great way to enhance your retirement pot. Bear in mind that the value of investments can fall as well as rise.
You may want to put some money aside for your family's future or a lifelong dream you want to pursue.
The 40s mantra: inject some extra rocket fuel into your savings plan.
The 50s decade is when those previously distant retirement goals start coming into sight – scarily fast. This is catch-up time where you need to focus on boosting your savings.
Don’t be tempted to coast now just because you’re nearly there. Especially if anything major in your life has changed, like financial and emotional downturns or career and relationship shifts.
Protect the pension pot you’re still working hard for in case anything happens.
What you could be doing in your 50s:
Invest some time in improving your financial wellbeing. Make sure you have a clear picture of what you want your retirement to look like. Our retirement calculator can give you an indication of whether you’re on track.
If you have a partner and one of you is a higher-rate taxpayer and one of you is a basic-rate taxpayer, it could make financial sense to boost the basic-rate pension pot. Again, the value any tax benefits will depend on your circumstances, and tax rules could change in the future.
You could consolidate your pension schemes. Although, be aware of exit fees and losing any existing benefits.
Find out about how to manage your inheritance tax bill.
The 50s mantra: keep your eyes on the prize.
The 60s decade is not an age where one life stops, and another begins. It’s a gradual transition – one that you should be in control of.
If you plan well, retirement can be a time of freedom and adventure where you can put your goals into action.
What you could be doing in your 60s:
Calculate whether your means meet your expectations by creating a budget – set out your household outgoings as well as more desirable expenses (from holidays and hobbies to birthdays and events).
More and more people are enjoying ‘semi-retirement’ as the best of both worlds. It can keep you physically and mentally active while also giving the all-important social element that work can bring.
Think about what you’d like to do when you retire to give yourself something to look forward to. Perhaps it’s spending more time with family, travelling, doing a DIY project, or learning a language – now is the time to plan for the fun stuff.
The 60s mantra: look forward to your future.
Don’t worry, we’re not suggesting you dish out your money to everyone.
Instead, perhaps share the wealth of knowledge in this guide with someone who’s just starting their retirement journey. There’s a world of younger adults out there whose future selves might appreciate the nudge.
