Steps and Support for Retiring with No Savings

Retirement is supposed to be a well-deserved rest at the end of a long career, a time for engaging in newfound hobbies and visiting all the places you never found the time to when you were working.

It shouldn’t be a time for anxiety or stress, and yet, for many, the feeling of having no savings for retirement can be overwhelming, and wondering how to retire with no money is not uncommon.

In this guide, we’ll outline the realities of doing so and provide information which can help you make the right decision for your specific circumstances and retire confidently.
 

Retiring with no savings: A quick summary

• Secure your benefits – Verify your State Pension entitlement and apply for Pension Credit if you have a low income, as this can unlock additional grants and support.
• Minimise your overheads –Reduce living costs by downsizing your home to a cheaper area or if circumstances allow clearing high-interest debts to lower your monthly outgoings.
• Bridge the income gap – Consider part-time work to provide additional income and social interaction during retirement.
• Evaluate your assets – For homeowners, property wealth can be a useful tool. However, options like equity release, which allow you to access money tied up in your home, should be carefully weighed against the long-term impact on your estate.

Check your State Pension and benefits

The first pillar of retiring with limited savings is the State Pension. This is a regular government payment you can claim upon reaching State Pension age.

At the time of writing, the State Pension age is 66 for most people, although it is gradually increasing. It will rise to 67 between 2026 and 2028, with a further increase to 68 currently scheduled between 2044 and 2046.

However, if you check your National Insurance record now, you can see how much State Pension you could get. The amount you receive depends on your National Insurance record and individual circumstances. Checking your record can also help you identify any gaps and find out whether you may be able to make voluntary contributions.

Pension Credit is a tax-free, means-tested benefit offered by the government. If you’re retiring with little to no money, it’s important to look into this, as it could provide valuable additional income in retirement. Missing out on Pension Credit, particularly if your retirement pot is small, can have a significant impact on your quality of life in retirement.
 

Managing debt before you stop working

Carrying debt can feel overwhelming, but taking small, actionable steps can help you regain control. One method you can use to manage your debt effectively is to prioritise high-interest arrears like credit cards first. This can help to reduce the overall interest you pay over time.

Managing debt can be an important part of planning for the future, as regular outgoings can make it hard to feel financially ready to retire. Paying off your balances or where suitable consolidating what you owe may free up significant breathing room in a tight budget. This can give you the flexibility to redirect that money toward your long-term savings.

If you are struggling to keep up with payments, debt management plans offer a way to restructure what you owe into more affordable monthly instalments. While these plans can provide much-needed relief, it is important to know they may negatively affect your credit score for several years. This can make it harder for you to access financial products such as loans.
 

Exploring your property options: Downsizing vs. Releasing Equity

Retiring with no private pension doesn’t mean you have no options. If you’re a homeowner, your home is likely your biggest asset and could be used to help fund your retirement in two different ways.
 

Downsizing

If you are retiring with a small amount of money, freeing up cash by downsizing could be an option. Living in a smaller home can help reduce your expenses. A smaller home can mean:

• Lower utility bills
• Lower mortgage/rent costs
• Lower maintenance costs

Selling your home and moving somewhere smaller and cheaper could also leave you with a significant sum of money you can use to help fund your retirement.

This is not without its costs, though, as you’ll need to pay solicitors and agents throughout the process. There is also an emotional cost, and it may be difficult to leave a home you’ve known for a long time. This is an entirely normal reaction, and many choose not to move for this reason. It’s important that you weigh up your options before making any big decisions.
 

Releasing Equity

If you're retiring with little or no savings, you may consider accessing some of the wealth tied up in your home. There are several ways to do this, including later life mortgages, retirement interest-only mortgages and equity release.

One option is a lifetime mortgage, a type of equity release that allows you to borrow money. A lifetime mortgage is a loan secured against your home. You can usually receive the funds as an initial lump sum, with the option to access further funds through an agreed drawdown facility if needed. However, future drawdowns aren't guaranteed and will be subject to the prevailing fixed interest rate at the time of withdrawal.

However, equity release is a long-term commitment that will reduce the value of your estate and may affect your future financial options. Any unpaid interest will build up over time, with interest charged on both the original loan and previously accumulated interest. This can increase the amount you owe and reduce any inheritance you may leave behind.

Releasing money from your home could also affect your entitlement to means-tested benefits, such as Pension Credit. A qualified adviser will help you explore your options and understand the potential implications before making a decision.

If you're considering this option, our equity release calculator can give you an idea of how much you could release.
 

Finding "lost" money and bridging the gap

You’ll want to gather as much money as you can as you prepare to retire, so locating any old workplace pension pots you might have forgotten about or lost over the years could give you some extra funds.

The UK government offers a Pension Tracing Service completely free of charge that can help you to find the contact details of your previous pension providers.

Additionally, you may want to consider a phased retirement whereby you work part-time for a few years to bridge any financial gaps before the State Pension kicks in.
 

Taking the next step with confidence

Retiring with no private pension can feel daunting, but there are options available to help you make the most of your retirement. From the State Pension and Pension Credit to later life lending options, including equity release, there are different ways to support your finances.

You can receive impartial guidance from Pension Wise or Citizens Advice to help you understand your options and make informed decisions.

Why choose Key? If you own your home, we can help you explore your options for later life lending, including mortgages and equity release, to find a solution that suits your circumstances. All our advice relates to mortgages, a loan secured against your home, and we'll consider all of your options rather than focusing solely on equity release.

Get in touch for a free, no-obligation chat today. Our advice fee is £1,699, payable only on completion.
 

Frequently Asked Questions (FAQs)

How much money do I need to retire without savings?

According to the Retirement Living Standards, a single person would currently need around £13,900 a year to achieve the minimum standard of living in retirement, assuming they have no rent or mortgage costs. If you have no savings, you'll need to consider what income you may have available from the State Pension, private pensions, investments and benefits such as Pension Credit.
 

What am I entitled to when I turn 60?

When you turn 60, there are a few important perks to be aware of. For example, in England, everyone over 60 receives free prescriptions. There are also discounts on public transport around the country. In London, for example, you can claim a 60+ Oyster card.

The State Pension age is currently 66 for most people and is gradually increasing to 67 between 2026 and 2028. Checking your State Pension forecast now can help you plan ahead and understand when you'll be eligible to receive it.

It's also worth checking whether you're eligible for Carer's Allowance, particularly if you provide regular care for someone. Eligibility depends on your circumstances, including how many hours of care you provide and your earnings.
 

What happens if you have no savings when you retire?

If you retire without any savings, there is support available to help you manage financially. The State Pension provides a regular income for those who qualify, while Pension Credit may offer additional support depending on your circumstances. However, this income may not be enough to cover all your retirement expenses, so careful budgeting is important.

Some homeowners may also consider using their property to help fund retirement. Options such as later life mortgages and equity release could provide access to money tied up in your home. However, these are long-term commitments that will affect your estate and future financial options, so it's important to seek professional advice.
 

Can I retire early with little money?

It is possible to retire early with little money, but it requires careful budgeting and consideration. You may also need to think about how you'll support yourself financially until you can access your State Pension.

Depending on your circumstances, options to help support your finances may include:

• Accessing any private pensions or investments you may have
• Downsizing to a smaller property
• Reducing debts and monthly outgoings
• Continuing to work part-time to supplement your income