Martin Lewis warns people aged 45 and over who 'have no pension'

Martin Lewis has issued a pension warning to people who are aged 45 and realising they have "no pension". The ITV The Martin Lewis Money Show star, who is a BBC Sounds podcast host, spoke out on the Not The Martin Lewis Podcast.

The Money Saving Expert founder spoke to Charlotte Jackson, Head of Guidance at the Money and Pensions Service. Discussing te issue with Charlotte, consumer champion Martin said: “If you’re 45 and have no pension, what do you do.”

Charlotte responded: “Don’t panic. You’re never too old to start looking at a pension but there’s obviously a wider set of things that you might want to consider. Are you employed? Are you able to save a little bit or not? Is there a workplace pension where your employer is contributing? What’s your wider financial situation like?

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“So at 45 we’d be saying a midlife review, the more you can save the better, it’s never too late.” Martin added: “Auto enrolment means you will save into your workplace pension by default. If you’re aged 22 to 66 and you earn over £10,000 a year, you are automatically opted in.

“Now the minimum total amount is 8 percent of what you earn and your employer must contribute 3 percent of that. A tiny quick note, if you’re not opted in because let’s say you’re aged 16 to 22 or let’s say 66 to 74 you won’t be opted in, in those circumstances, you can say to your employer ‘I want to opt in’ and they must let you opt in and contribute the same as if they let you automatically enrol.

“So step number 1, check if your employer is giving you a pension. Well it has to by law.” He added: “No-one does this. Do not panic. But it is this old equation, it’s not particularly accurate but it gives you a good sense. You take your age when you start putting in your pension, you halve it, 15, so the equation says you want to put 15 percent of your income into your pension for the rest of your life to have a pretty strong retirement fund.

“Very very few people manage that. But the real lesson from that is the earlier you start the better as the more time your money has to grow. Early is better and the more you can catch up better.”