In this article, we’ll explore how much you should aim to have in your pension pot at 50, highlighting what steps you might need to take to secure the retirement you envisage.

According to the Institute for Fiscal Studies, nine out of ten people are not saving enough to ensure a comfortable retirement.

This isn’t surprising. The high cost of housing, expensive childcare, and the general rise in living expenses mean people simply aren’t able to contribute as much as they should to their retirement savings.

If your 50th is approaching, or you’ve already reached this milestone, now is the perfect time to assess your retirement savings and, if needed, start boosting your pension pot.

One of the most important things to consider is the type of retirement you want. This will give you a clearer picture of how much income you might need. Are you dreaming of a retirement filled with luxury travel and fine dining? Or are you looking forward to a quieter life, enjoying your family and more time for hobbies?

A general guideline is to aim for an income that’s two-thirds of your current salary. For instance, if you earn £60,000 a year, you might aim for a retirement income of around £40,000. However, the actual amount you’ll need will vary based on your lifestyle choices and future living costs.

To provide some context, the Pensions and Lifetime Savings Association (PLSA) suggests the following annual incomes for a single person, alongside descriptions of different standards of living:

• Minimum – Covering all your needs, with some left over for fun: £14,400
• Moderate – More financial security and flexibility: £31,300
• Comfortable – More financial security and some luxuries: £43,100

These figures are a helpful starting point but it’s important to remember that your financial needs will be specific to you. Your planned lifestyle, personal circumstances, health, inflation, and even where you live in the UK will all come into play when considering your income needs.

By the age of 50, you’ll ideally already have a substantial amount saved in your pension pot. However, if you haven’t, it’s not too late. Now is the time to book a meeting with a financial planner who will be able to calculate whether you’re on track, or not.

Because of the variances described above, it’s not possible to give a recommended pension pot amount, at a given age, that works for everybody.

However, if you plan to work until your qualifying State Pension age, Moneysupermarket.com estimates a pension pot of around 10x your final salary is a good ballpark target. If you’re planning an early retirement, you’ll need a larger amount to see you through those first few years before you can receive your state pension.

If you’re not where you want to be at 50, maximising your pension contributions becomes crucial. With more years of work behind you than ahead, it’s time to take a strategic approach to your savings and investments.

• Consider increasing your contributions: The earlier you’re able to boost your contributions, the longer your money can be invested and the greater potential it has to grow.
• Review your pension investment strategy: It’s important to ensure the way your money is invested reflects your goals, preferences, risk profile and circumstances both now, and in the future.
• Keep on top of your pension pots: You may have multiple pension pots from different jobs, so make sure you know where they all are. Consolidating them can simplify management and potentially save money on charges – but does come with risks, such as the loss of valuable benefits.

It’s important to keep up with regular contributions, even if it feels too late. If your pension pot is relatively small, or you’re yet to start, you might need to contribute more each month to catch up.

For example, starting a pension at 50 means you’d need to contribute around £1,122 each month to reach a £200,000 pot by 67 – that’s assuming 5% annual growth.

A general guideline is to take the age you start contributing, halve it, and add a percentage sign. For example, if you’re starting at 50, aim to save 25% of your salary each year.

However, this all depends on your current savings, the age you plan to retire, and the kind of retirement you want. This may also not be a realistic figure for you to save each month.

Seeking the advice of a financial planner will provide you with accurate advice tailored to your situation.

Knowing exactly how much to put aside each month can be complex, but input from a financial professional can provide clarity and peace of mind.

Amber River financial planners can offer you a personalised strategy, cashflow modelling to show you what your financial future might look like, and advice on what to do with any pensions you already have. They can help ensure your retirement savings are on track and aligned with your goals.