Is it too Late to save? How To Start Saving at 40

One in five workers in the UK hasn’t put anything away for their retirement and is planning on relying on their state pension. However, the maximum state pension that you could receive in this country is just £107.45 per week.

If you’ve reached your 40s and have realised that you’re in the same boat, it’s not too late to change things around. If you start now you could have a chance at saving something towards your retirement.

Where do I begin?

To start with, you’ll need to figure out how much money you’ll need for your retirement. You can use a retirement plan calculator to do this and then you’ll at least have an idea of where to go from there.

The next step

In order to start saving for your retirement you have to do just that – save. You can choose whether you want to set up a works pension or a private pension but, to be honest, at this point you should probably consider both.

Depending on your place of work, your employer will probably pay into your pension as well, which can help you to earn more from it. Your private pension will also accrue interest over time, which is why it’s so important to start saving ASAP.

How much should I save?

The real issue here is that you’ll be trying to make up for lost time. With this in mind, you should only save as much as you physically can, otherwise you might end up with financial difficulties in the here and now.

start saving at 40


The amount that you save will be entirely dependent on how much money you have available each month. You can set up a monthly deposit scheme for your pension plans, and then you can add lump sum amounts if you have any extra cash.

Speaking of extra cash…

If you receive any bonuses at the end of the year, they should go straight into your pension and savings accounts instead of being frittered away. Now might also be the time to begin working towards that pay rise.

Consider deferring

You can defer your pension and continue working past your State Pension Age (SPA) in order to increase its value. By doing this your pension will be increased by 1% every five weeks that you defer it for. If you were to defer it for a full year, you could receive an extra 10.4% of what you’d already saved.

Most importantly – don’t worry

Worrying about the past won’t get you anywhere, so stop dwelling on all of the years you didn’t save and start saving right now.

Setting up a retirement plan in your 40s might seem unconventional, but there’s no reason why you can’t still retire with a good pension plan. As long as you think sensibly and set yourself rational savings goals you can plan your retirement effectively.

This article was provided by Aurora Johnson on behalf of Cheselden, a care home claims specialist.

Vijayraj Reddy
Vijayraj Reddy is founder & editor-in-chief of, a financial blog which helps people to earn money, invest money and save money. You can find him on Facebook & Twitter or send him email at [email protected]

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