35 percent of UK adults over 50 have a significant retirement savings gap; here's how to increase your pension pot

There are things you can do right now to increase your pot, but people over 50 are facing a later life with little to no money

People over 50 who are experiencing a deficit in their retirement income have been warned. We show you how to increase your pension fund.

According to new research, 35 percent of British citizens over 50 will experience a retirement income shortfall of at least 10 years based on their average life expectancy.

When compared to a possible 100-year lifespan, more than seven out of ten (74 percent) are predicted to fail.

Over 11,800 people in 13 countries, including 1,000 retirees and pre-retirees in the UK, participated in a survey conducted by Fidelity International to gauge their readiness for later life.

Of the 13 countries, 42% are experiencing a ten-year or longer income deficit, and 81% would be at the bottom of the barrel if their income reached 100 percent.

The 10-year savings gap was computed by comparing the average life expectancy for men and women in the UK with the length of time people anticipated their retirement savings would last.

The Office for National Statistics (ONS) estimates that in 2023, women will live to 88 years old, while men 65 and older will typically live to 85.

When asked if they expected their savings to last until death, respondents in the UK stated that they expected to live an additional 19 years at age 66.

But according to the calculations, they would run out of money in retirement given the average life expectancy.

People who live longer have to endure longer periods of time without enough money to cover their daily expenses.

According to Stuart Warner, global head of platform solutions at Fidelity International, "Although people are living longer than ever, too many are planning for their parents' and grandparents' retirements.

Many people could be unprepared as a result of this mismatch between life expectancy and savings horizons.

"Longer lifespans can be a good thing if they are planned for, but it takes early action and a different perspective.

Fidelity International also asked over-50s in the UK if they were optimistic about their retirement.

Remarkably, 74 percent of retirees and 56 percent of pre-retirees reported feeling good.

In contrast, only 18% reported having consulted a financial advisor to assist with their retirement planning, and only 24% reported having a retirement budget prepared.

A graph illustrating the proportion of people over 50 who are short on retirement funds.

Ways to increase your retirement fund.

There are actions you can take right now to increase your pension fund if you anticipate experiencing a decline in income in later life.

Make the most of your workplace pension.

Making the most of your workplace pension contributions is worthwhile, according to Kate Smith, head of pensions at Aegon.

Most people are automatically enrolled in a workplace pension, where you contribute 5% and your employer must contribute a minimum of 3%. Nonetheless, some companies will match your donations.

"This is a low-effort method to increase your pot while you're still making money if you're over fifty," Kate said.

It is particularly helpful if you intend to retire gradually or continue working for a longer period of time.

Look for former pensions.

Find out about lost or outdated pensions from past employment. To reduce the amount of work you have to do and save money on fees, you might want to consider combining them, Smith suggested.

Both the government's tracing service and a number of pension providers now provide a free tracing service.

Increase your state pension.

You should increase your state pension whenever you can, even though it might not be sufficient on its own to provide you with a comfortable life after retirement.

The government's check your state pension tool allows you to get an estimate of your state pension.

You can make up any National Insurance (NI) years that you have missed if you are not on track to receive the full new state pension, which is currently worth 11,973 annually.

Delaying the withdrawal of your state pension also gives you a larger payout when the time comes to claim it.

For every nine weeks you defer, the new state pension rises by the equivalent of 1%, making it slightly less than 5.8% for every 52 weeks.

In a separate article, we examine the advantages and disadvantages of deferring the state pension.

Maximize your pension contributions.

The personal financial specialist at Fidelity International, Marianna Hunt, advised trying to maximize your pension benefits.

Tax relief is still available if you contribute up to £60,000 annually to your pension.

"Remember, you can use unused annual allowances from the previous three tax years, potentially allowing contributions of more than 60,000 in a single year," Marianna continued.

Employ salary sacrifice.

Make use of a portion of your pay and use it for salary sacrifice to fund your pension.

It will result in a top-up to your pension and lower income tax and national insurance on your pay.

Additionally, your employer will pay less in national insurance, and some will use this savings to double-top up your pension.

Analyze your investment options.

A lot of default pension funds will lower your portfolio's risk as you approach retirement.

To improve your chances of greater long-term returns, you might want to take a greater risk.

Hunt stated: "In the hopes of higher returns, you might want to allocate more to stocks and shares rather than bonds, thereby taking on greater risk."

"If you do this, it's crucial to have a sizable cash reserve to prevent having to liquidate investments at a loss in the event that markets decline and you have to take money out of your pension.

Before you take your 25% tax-free lump sum, give it some serious thought.

According to Sarah Pennells, a consumer finance specialist at Royal London, delaying the decision could ultimately benefit your finances more than taking out your 25% lump sum tax-free.

"While it may be tempting to take the money, doing so lessens the amount that can be invested and grow.

"If you do take a lump sum, make sure you have a clear plan for it and keep in mind that subsequent withdrawals will incur taxes.