Here’s how I boosted my pension at 45 after my divorce

 At the age of 45, Emma McCaffery experienced what she called a “pension wobble” when she realised she had not saved enough for retirement.

It happened a couple of years ago after her divorce, the self-employed personal trainer from Winchester said.

Speaking to The i Paper, she said: “I had just moved house, and I had started paying my mortgage solo, and it occurred to me that my financial security is now down to me.

“I think I had been in limbo for such a long time – divorce is a long process – and I had put everything off until everything was sorted.”

She had previously worked in a corporate job with employer pension contributions but admitted she wasn’t putting much away each month.

After being made redundant, then going freelance and eventually setting up her own business, she decided it was time to get her finances in order.

The mother-of-two said: “I realised that the years before retirement age were no longer in the distance and were now on the horizon with my mortgage, and everything else, counting down.

“I no longer had years and years stretched out in front of me. It felt like a bit of an existential crisis in that I didn’t see how it would be possible for me to make up the shortfall. I felt anxious and afraid.”

At the time, she had around £100,000 saved across two pension pots from former jobs.

For a comfortable retirement in the UK, a single person typically needs a pension pot of around £490,000 to £790,000, according to financial firm St James’s Place. This assumes receiving the full state pension and converting private savings into an annuity.

Ms McCaffery said: “I saw a pretty wide gap in terms of where I wanted to be by the time I retire.

“On and off, I had been contributing between £100 and £250 when I could but it was not consistent, and I was focused on getting into a new home and mortgage first.”

She reached out to a financial adviser – a personal contact – who agreed to review her finances.

“She was kind enough to sit down with me for a brief look at my finances, and it wasn’t long before I became overwhelmed and burst into tears.”

After that meeting, she opted to manage her finances independently. She performed a complete audit, “meticulously” going through all her outgoings, savings, and debts – “essentially starting from scratch to get a clear picture of my financial standing”.

She started by checking the performance of her pension pots and reviewing her national insurance record.

She said: “I started by thoroughly researching my existing pension pots to assess their return on investment. It was important to me to ensure they were performing well.

“I also checked my state pension contributions to confirm I was up to date, especially after periods out of work raising my children, to avoid any gaps.”

To understand what she would need in retirement, she used Pensions UK’s retirement living standards website.

“From there, I worked out how much I could realistically contribute each month to achieve that goal, while also ensuring I had enough for my current needs.”

She now contributes £250 per month to her retirement savings, adding: “I thought I can only do what I can do and there is no point fretting as none of us knows how long we will work, live and what we might need.

“Of course, if my income increases or my expenses decrease, I’ll definitely consider upping that amount.”

She’s also taken steps to help her children, by setting them up junior self-invested personal pensions (SIPPs), so they’ll have a head start on their own financial journeys when they begin working.

As someone who is self-employed, she said: “There isn’t an employer contributing to a pension on my behalf, nor are there matching schemes like those found in traditional employment. This requires a proactive approach to setting up and managing my own retirement plan.”

She makes use of tax breaks available through private pensions, like SIPPS, which she said make “a substantial difference to the growth of my retirement pot”.

She doesn’t expect to stop working completely though, even when she reaches retirement age, because of how much she enjoys her job, as the founder of fitness program Move with Emma.

She said: “Looking back, I wish I had been more proactive about understanding and contributing more to the employer pension schemes I was enrolled in.

“Especially since many companies offer matching contributions, it’s essentially free money that I didn’t fully take advantage of.

“At the time, I just didn’t think that way. It was probably a combination of my age and a lack of understanding about long-term financial planning.

“I was very much in a ‘live for the moment’ mindset, believing I had years to worry about that kind of stuff. But let me tell you, it creeps up on you faster than you think.”