The Best Investments for Retirement

Written by Karen Bryan

investmentHere are my tips on the best investments for retirement. I recommend starting to save for retirement as soon as you start working, diversification to manage risk and regularly monitoring your investments.

A Workplace Pension

One of the most efficient ways to invest for your retirement is through a workplace pension, especially if your employer also makes contributions to your pension pot. You get tax relief on your contributions (up to 100% of earnings, to a maximum of £40,000 a year in the tax year ’15-’16).

The best types of workplace pension are when the amount that you receive for your pension is guaranteed, e.g. a final salary or career average scheme. Other workplace schemes such as the National Employment Savings Trust (NEST) don’t offer any guarantees. The amount which you receive is dependent on the value of the fund in which your pension pot is invested. The earliest age at which you can access any pension pot is 55.

A Personal Pension

If you want to top up your workplace pension, or if, like me, you are self-employed so don’t have access to a workplace pension, you can save for retirement in a personal pension. Again, the crucial thing to remember is that there are no guarantees of the value of your pension pot, as it depends on the value of your investments at the time you wish to retire.

State Pension

From April 2016, if  you have paid 35 years of National Insurance Contributions (NICs), you will receive the full flat rate UK State Pension of around £150 a week. If you haven’t made enough contributions you can top up through Class 3 voluntary NICs.

Individual Savings Accounts (ISAs)

Cash and Stocks & Shares ISAs allow you to save up to £15,240 annually (in the tax year ’15-’16). There’s no income tax on interest received on a Cash ISA . With Stocks and Share ISAs, there’s no capital gains tax, although you do have to pay 10% tax on income from investments. You can mix the cash and stock market ISAs, e.g. have 50% cash and 50% stocks and shares.

ISAs are more flexible that pensions, as you can access the money at any time. But that’s also a disadvantage of using ISAs for investing for retirement, as you could dip into the cash too early.


Property values have risen in many parts on the UK. Some people see the equity in their home as part of their retirement income, as they plan to downsize to release some of that equity. But it’s impossible to say what will happen to property values over the next few decades.

Buy to let property is popular, as it generates an income and the hope of capital appreciation. You do have to factor in periods without tenants and costs to buy,maintain and sell the property.

A Part-Time Business

In my opinion, investing in yourself by setting up a part-time business can not only provide some additional income during retirement, but also give you an interest. If you have a day job, you could start a business before retiring. If the business does well, the money made from the business could allow you to retire early.

When I started my online publishing business in 2002,  aged 43, I wanted a business which I could run from home, working flexible hours which would give me the opportunity to work into my older age. Initially I kept my day job, but in 2009 I decided to work on my own business full-time.

Take a Punt

You could take a punt by buying a lottery ticket for EuroMillions or Mega Milllions from Lottosend, or some Premium Bonds. A prize of £1 million plus would certainly secure a very comfortable retirement.

Hopefully with a diverse portfolio of investments for retirement, started in your 20s, you will secure a comfortable retirement.