I’m a Gen X with just £21,000 in a pension at 49. I want £500,000 by retirement

Vanessa Myers had been working for more than two decades before she began thinking seriously about her pension. By then, the freelance graphic designer was in her mid-40s and had accumulated just £10,000 across two old workplace pension schemes. Now 49, Myers, who lives in Rugby, Warwickshire, and earns around £60,000 a year, has increased her retirement savings to approximately £21,000, but hopes to build a £500,000 pot eventually. Shorts She says: “A pension just wasn’t something I thought about before – but when I realised I needed to start thinking about it, I thought: at least there’s time to do something about it.” Her reluctance to save for retirement was partly shaped by losing her mother when she was just 24. After seeing her mother pay into pensions she never lived to use, Myers decided to focus on enjoying the present. “After my mum died, I thought: just live your life,” she says. “Now I’m the age my mum was when she died, I realise I could live for another 30 or 40 years and I need to have those provisions in place.” Many Gen Xers like Vanessa Myers have fallen into a pension savings gap Vanessa isn’t alone. She is part of Gen X, those roughly aged 46 to 61, many of whom fell between two pension systems: too late to benefit from generous final salary schemes, and too early to take full advantage of auto-enrolment, the scheme whereby workers are automatically signed up to their workplace pension. Around seven million Gen X workers could be headed towards a retirement without adequate income, warns research published by The Social Market Foundation and Standard Life. Myers was employed full-time from age 22 to 30, during which time she contributed small amounts to workplace pensions. But she stopped saving when she was 25 and moved jobs. In 2024, she restarted her contributions, adding £600 a year to each pot. She also opened a self-invested personal pension (Sipp) with Moneybox, into which she pays £75 a week. She currently has £11,000 in this account. Elsewhere, Myers has a few thousand pounds in savings, which she splits between a cash ISA and stocks and shares ISA. Her current priority is building up her savings pot and paying off her mortgage, but she hopes that in a few years she’ll be able to ramp up her retirement savings. But with £120,000 left on the mortgage for her three-bedroom house in Rugby, she expects it will take another 15 years to clear, even if she does keep making overpayments. “I think once mortgage rates and all that kind of stuff have gone down, the world will seem a bit more comfortable and I’ll be able to pay more,” she says. “My current projection is that I’ll retire with around £250,000, but I know that’s not enough. I’d like to have between £500,000 and £1 million.” Based on her current retirement savings, if she keeps saving at her current rate, she could have £219,242 aged 70, assuming annual investment growth of 5 per cent, according to interactive investor. “I’ve started listening to podcasts about pensions and learned about compound interest – I thought: I missed that opportunity,” she says. “I’m grateful for the pensions I do have and think I can catch up on those years I didn’t save – but 20 years is a lot of catching up to do, isn’t it.” She adds: “I really wish somebody had told me when I was younger to save a small amount, even just £100 a month. But retirement just seemed so far away”. How to get your retirement saving back on track Gen X might be behind on their pension savings, but there is still time to catch up. Here are the simple steps you can take to help boost your retirement pot: 1) Find lost cash Take some time to assess where your retirement savings are at. You might even have some old pension pots you’d entirely forgotten about. “Tracking down old pensions is one of the simplest actions people can take to improve their long-term financial future,” says Brian Byrnes, director of personal finance at Moneybox. “Even if each pot seems relatively small, together they can add up to tens of thousands of pounds that could make a real difference in retirement.” The Government has a free pension tracing service that can help. Once you’ve found lost pots, consider consolidating them into one. “This can make it easier to track retirement savings, reduce admin and potentially reduce fees,” says Brynes. Give yourself a pension wealth check Now you know how much you have already; it’s time to work out how much it could grow. Use a pension calculator to help you determine how much you could retire with and whether you need to save more, suggests Sarah Coles, head of personal finance at AJ Bell. According to Pension UK, a trade body, a single person needs an income of £32,700 after tax for a moderate standard of living in retirement, not including any housing costs. A couple would need £45,400 between them. Find out if you’re on track to get the full state pension and when you’ll start receiving it. You can do this on the Government website. 3. Increase your contributions If you’re worried that your pot is falling short, it’s time to increase the amount you’re saving. Funnel pay rises or bonuses into your pension if you can afford it. Even small amounts will add up over time. Employed workers will get a boost to their contributions from their employer, and all contributions get a bump from tax relief. Higher rate taxpayers, for example, get 40 per cent tax relief on their pension contributions, meaning a £100 contribution effectively only costs you £60. Fraser Kerr, from interactive investor, says: “Retirement planning can be uncomfortable when the numbers suggest you’re not on track for the lifestyle you want. However, avoiding the issue simply reduces the time available to act.” For those looking for more guidance, those over 50 can get free advice through Pension Wise, while Unbiased is a good resource to find a registered financial adviser.