How to save for your future - 57+ year olds

How do you picture your retirement - travelling the globe? Living by the seaside and enjoying the sun?

Sadly, millions of people will find such a comfortable existence out of reach, unless they start saving more into their pension.

Four in 10 people are not saving enough for their retirement and two in 10 are not saving anything at all, according to research from AXA.

Andy Zanelli, head of retirement planning at AXA Wealth, says: "Rising longevity means retirement is likely to be longer than ever before. Planning ahead and taking control of your financial future as early as possible is vital."

The good news is that it is never too late - or too early - to begin saving for the future. We explain how to get started whatever your age.

Find the best annuity rate for your circumstances

Age: 57 plus

Retirement is now on the horizon and you need to think carefully about your options. Most people buy an annuity with their pension pot, which provides a regular income for life. If you plan to buy an annuity in the next few years, you need to start to reduce the level of risk in your portfolio, as your funds will have less time to recover from a major market fall before you need to access them.

Traditionally, investors move away from equities and start investing in bonds. These are loans for a set period at a fixed rate of income, to the UK government (known as gilts), to another government or to a company (corporate bonds).

However, Khalaf is wary of UK gilt funds because gilt yields are now at historic lows. He prefers exposure to corporate bonds, and suggests the Jupiter Strategic Bond, which has grown by 13.6% in the past year and has a 1.25% annual charge.

The fund invests in various bonds, including those from the Australian government and Microsoft. He also likes the M&G Optimal Income, which also has a 1.25% charge, returned 13.6% in the past year and has holdings in gilts, as well as Germany and US government bonds.

Now is also the time to get a state pension forecast from the Pensions Service (call 0845 3000 168). Continue to use an online pension planning calculator to see if your own savings are on track. This should avoid any nasty surprises when you come to retire.

How to draw your pension

You've spent years saving into your pension. So how can you make sure you get the most out of it?

There are two main options when it comes to turning your pension fund into an income for retirement. One is to buy an annuity, where usually the entire pot is handed over to an insurer in return for a set income for life.

Anyone buying an annuity should shop around for the best deal; don't just accept the offer from your pension provider. You may be able to get a much higher income elsewhere.

When buying an annuity you should also declare any health or lifestyle issues such as smoking or high blood pressure. These could lead to a higher income, simply because you are not expected to live as long.

You also need to consider if you want an income that increases with inflation every year; and if you want your spouse to receive the pension after you die. Both these options will mean your starting income is smaller because the payments will have to increase later.

Buying an annuity is irreversible and can have a huge impact on the quality of your retirement. It is therefore worth getting expert advice.

Those with larger pension pots (around £150,000 or more, if you have no other sources of income) could consider income drawdown instead of an annuity. This involves taking a regular sum from your pension fund while keeping the rest of the money invested. You can still buy an annuity at a later date.

Auto-enrolment is here

All workers aged 22 or over and earning more than £8,105 a year will soon (if not already) be automatically enrolled by their employer into a workplace pension. Even better, employers have to contribute. From 2018 your employer will have to pay in at least 3% of your earnings.

You can opt out if you want, but the government is hoping the new system will provide millions of people with a pension for the first time.

Very large companies started enrolling workers last month, with smaller companies following over a period of several years. Ask your employer for more details. For more information go to