If that’s the case for you, now may be the time to up your saving game and to prioritise your pension over all other things your money could be going towards.

Here are a few thoughts around pension saving in your 40s that could help you stay focused on your journey and make the most out of perhaps the most financially rewarding time of your career.

Prioritising saving for later life

A recent research by Standard Life* which sampled UK adults aged 18 to 80 found that 72% of people surveyed do little or no retirement planning while 78% hope for certainty of income in retirement. There’s a clear disproportion between carrying overly optimistic expectations about retirement and doing very little or no preparation at all now in order to be able to meet those expectations. Don’t be the statistic and act now to be able to afford the retirement you hope for.

Now you’ve got a few financial milestones behind your back and have a bit more freedom to fund your own wants and needs, why not think about your future self and make the most of the saving opportunities you have. It may be tempting to spend your disposable income on exotic holidays or investing in property, but is this going to help you have a decent life in retirement?

You can’t borrow for retirement and you can’t make more of time so it’s important to focus on saving for later life now you can afford to invest more in your pension. Do it now and you’ll thank yourself later when your working days are over and you’re living an enjoyable life thanks to the sacrifice you’ve made previously.

With the Fund, you can save extra towards your pension if you want to. You could do this by paying in Additional Voluntary Contributions (AVCs). AVCs are a great way to save tax-free either by giving your pension a one off boost or by making regular additional payments towards it.

Compounding is still a key factor

Compounding – the effect of money invested achieving growth on the growth they’ve achieved initially, not just on the original sum invested - continues to be a great helper when it comes to saving for later life. It’s a very powerful positive of having your money invested for a long period of time as the longer it’s been invested, the longer it has to grow.

If you’ve started saving for later life in your 20s, you’ve probably managed to build up a sizeable nest egg by now. Thanks to compounding, you’ll probably continue to benefit from further growth on your savings, not just from the money you keep paying in but from the compounding effect on it as well.

Read more about compounding in our previous articles in the pension planning series.

Have you accumulated a few different pension pots over the years?

You’ve probably been saving for retirement for a couple of decades now and it’s likely you’ve built up a few pension pots over the years. While in your 40s, you’re in the middle of your saving journey and now might be the perfect time to take stock of what you have.  If you think you've lost track of a pension, you may want to turn to the Pension Tracing Service for help. It's a free, impartial service to help find your lost pensions and then offer guidance on what to do with them.

You may also want to consider starting a pension planner and keeping track of how your different pots are performing. You may also benefit from seeking independent financial advice. Go to https://www.unbiased.co.uk/ to find an independent adviser from a trusted source. 

If you haven’t really given retirement a thought yet, there’s still time to start saving and make a big difference to your financial future.

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*Retirement Voice 2022, Exploring how retirement attitudes and experiences are changing by Standard Life