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Saving for retirement in your 40s

Important information - the value of investments can go down as well as up so you may not get back what you invest. Eligibility to invest in a SIPP and tax treatment depends on personal circumstances and all tax rules may change in the future. You cannot normally access money in a SIPP until age 55 (57 from 2028).

You’ve probably been saving for a while now and it's likely you've accumulated a number of employer pension pots over the years. This can be a good time to take stock of what you have, and make the most of the opportunity still open to you. If you haven’t really given a thought to retirement yet, there’s still time to make a big difference to your pension.

Planning your retirement

The first step is to figure out what you might need in retirement, and what your current pensions might provide.

Estimate what you’ll need

Our retirement calculator will help you to compare your income and expenditure in retirement.

Retirement calculator

Estimate what you’ll get currently

Get an estimate of the income you could receive from your pension with an annuity, drawdown or a combination of both.

Pension calculator

What you can do now

Maximise your employer contributions
Set up a regular savings plan
Make a one-off payment
Regularly review your payments
Keep pace with your salary increases
Use your carry forward allowance
Bring your pensions together
Learn how investing can boost your chances

The tax benefits of a pension

  • Investment growth of your savings in your pension is not taxed
  • In a personal pension such as the Fidelity SIPP, we can claim 20% tax relief from the Government and add it to the money you save
  • You can save up to £40,000* a year in your pension and receive tax relief so long as it’s not more than you earned
  • You can claim money off your tax bill if you pay more than the basic rate of income tax.
  • From the age of 55 (57 from 2028) you can normally take a tax-free lump sum worth up to 25% of your pension

By how much can you boost your retirement savings?

  BASIC RATE TAXPAYERS 40% RATE TAXPAYERS 45% RATE TAXPAYERS
You Pay Government adds Total in your SIPP Claim back up to an extra Effective cost as little as Claim back up to an extra Effective cost as little as
£8,000 £2,000 £10,000 £2,000 £6,000 £2,500 £5,500
£32,000 £8,000 £40,000 £8,000 £24,000 £10,000 £22,000
£80,000 - - £20,000 £60,000 £25,000 £55,000
£104,000 - - £26,000 £78,000 £32,500 £71,500

These examples are not tailored to individual circumstances and are based on the rates of tax relief for residents in England, Wales and Northern Ireland. Rates of tax relief for Scottish Residents differ to the rest of the UK.

Remember, to receive tax relief, your personal contributions can’t be any higher than your earnings. The rate at which you can receive tax relief depends on the rate of Income Tax that is applied to your earnings, which will vary depending on the amount you earn and where you are resident for tax purposes. 

Tax treatment and eligibility to invest in a pension depend on personal circumstances.  All tax rules may change in the future.

Note: your total contribution amount is not the amount you pay in, though in some cases it will be, but rather this is the amount that will be in the pension after the contribution has been made and basic rate tax relief has been added.

An essential guide to saving for retirement

Did you know a single person will need about £33,600* a year for a comfortable retirement? With the new State Pension paying a maximum of £9,627.80 per year from April 2022, there’s clearly a gap.

Our guide provides you all the information you need to make sure you’re ready for the future you want.

Download guide >>

Source: Pension and Lifetime Savings Association - UK Retirement Living Standards October 2021.

 

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Thinking of paying a large contribution?

If you have income of £200,000 or more (including pension contributions from an employer), you need to be aware of the tapered annual allowance - please read our guide for more information.

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Thinking of transferring?

To find out what you should consider first, please read our Fidelity SIPP transfer guide.

Our awards

We don’t like to blow our own trumpet, but its nice when someone else does.  We’re also proud to announce we’re a Which? Recommended Provider for Self-Invested Personal Pensions - two years running.
 

See our awards 

What next?

If you want to open a new pension or transfer an existing pension to Fidelity, then take a look at our Self-Invested Personal Pension (SIPP). It’s a flexible, tax-efficient and easy-to-manage pension designed to help you to reach your pension goals.

Open a pension

  • A tax-efficient way to invest for your retirement (subject to limits)*
  • Benefit from 20% government tax relief, added to your SIPP account
  • If you pay Income Tax at higher than the basic rate, you may be able to claim even more tax relief through your tax return
  • Employers can also contribute. Payments from a limited company are considered employer contributions

Transfer a pension

  • Transfer your pension to us and we’ll pay any exit fee (up to £500 per person, T&Cs apply**) that your current provider charges you
  • It’s easy to submit your request online, and depending on your current pension provider your transfer could be complete in ten business days.
  • We’ll contact your providers and arrange for your investments (or cash) to be brought into your Fidelity account
  • If you apply to transfer a SIPP through our website, you can track your transfer's progress using our transfer tracking tool.

*Tax relief is only available on the lower of the annual allowance (currently £40,000) or 100% of your earnings in a given tax year. If you exceed your annual allowance you may have a tax charge to pay unless you have unused allowance you can carry forward. If you have earnings of £200,000 or more, the amount you can pay in and receive tax relief on could be ' tapered' down to £4,000. Alternatively, if you’ve already taken taxable income from your pension pot under pension freedoms, your annual allowance may be £4,000 (known as the money purchase annual allowance) and you will not be able to use carry forward to contribute to a SIPP.

For more information on tax relief and all the allowances please visit our pension allowances page.

Important information - It’s important to understand that pension transfers are a complex area and may not be suitable for everyone. Before going ahead with a pension transfer, we strongly recommend that you undertake a full comparison of the benefits, charges and features offered. To find out what else you should consider before transferring, please read our transfer factsheet. If you are in any doubt whether or not a pension transfer is suitable for your circumstances we strongly recommend that you speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

Get your pensions and ISAs working harder for you

If you’ve got investments spread across multiple providers, moving them to Fidelity could make them easier to manage and help get your money working harder. Plus get £100 to £1,500 cashback. Exclusions, T&Cs apply.

Find out more
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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment please speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.