Saving for retirement on low income can feel pretty daunting when money is tight, but you’re not alone. Looking ahead to the future and thinking about your pension doesn’t have to be overwhelming.
When you’re trying to make every penny count, saving for retirement on low income feels like a massive challenge. But here is the truth: you don’t need to be a high earner or a qualified financial expert to take control of your pension.
I’m no pension advisor—just an average saver figuring things out as I go. Here is how I keep my pension simple, track down forgotten pots, and make my money work a little harder.
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Saving for Retirement on Low Income Starts with Your Workplace Scheme
When it comes to my retirement, I try to keep things very, very basic. I’ve gone through investing and growing your wealth in other blogs I’ve written, but your workplace pension is the easiest place to start.
My company pension scheme is with Royal London, and it comes out automatically from my wage. If your employer offers a pension scheme, I always advise joining it because whatever you put in, the company has to top it up for you. It’s a brilliant, effortless way to grow your retirement pot without having to think about it.
Track Down and Combine Old Pension Pots
Another step I took recently was tracking down a pension from a previous employer that I had totally forgotten about.
A letter arrived at my parents’ old address—where I used to stay—letting me know I had some money sitting in a different pension provider, Scottish Widows. To keep everything simple and easy to manage, I transferred that old Scottish Widows money straight into my Royal London account so all my savings were in one place.
The process is surprisingly straightforward:
- Log into your new provider and give them your old pension details.
- They handle the transfer automatically for you.
The last thing you want is the headache of ringing around and dealing with multiple different companies. Try to keep it to one provider that best fits your needs.
Check What Fund Your Pension Is Invested In
I also noticed that my pension wasn’t really growing much because it was sitting in a very “steady eddy” default fund.
Looking at my finances while saving for retirement on low income, I wanted my money to work harder over the long term. So, I contacted my account manager for Royal London and we had a great discussion about my retirement goals. We went through the numbers together—they were very professional and explained everything clearly—and we switched my fund into a higher-growth option.
Yes, it carries a bit more risk, but it offers a lot more upside for growth.
Take a look at what your pension is currently invested in. Are you happy with the risk and performance? If not, reach out to your provider to see what other fund options they offer.
Over to You!
What are your thoughts on saving for retirement on low income? Drop a comment down below with any pension providers you recommend or tips you’ve found helpful!
Can I really save for retirement if I am on a low salary?
Yes, absolutely. Even small contributions add up over time, especially when combined with workplace pension schemes where your employer is required to add their own contribution.
Should I combine my old pensions into one pot?
If you have forgotten pension pots from previous jobs, consolidating them into your current active provider can make them much easier to manage, track, and keep an eye on.
How do I know what fund my pension is invested in?
You can check your annual pension statement or log into your online provider portal. If you find your money is sitting in a low-growth default fund, you can contact your provider to discuss switching to a higher-growth option that fits your goals.