Martin Lewis explains where to start if you reach 45 with no pension plan

Martin Lewis and his team of pension gurus have reassured Brits, urging them "don't panic" if they've left their retirement planning until the eleventh hour, outlining some tactics they can employ in their final working years.

In a pension-centric episode of his eponymous BBC podcast, Martin Lewis fielded a question from a listener named Laura, who was frantically asking what to do "if you're 45 and have no pension".

Charlotte Jackson, the head of guidance at the Money and Pensions Service, immediately responded with: "Don't panic, you're never too old to start looking at pension but there's a wider set of things you want to consider."

"Are you employed? Are you able to save a little bit or not? Is there a workplace pension where your employer's contributing? What's your wider financial situation like?

"At 45, we'd be saying having a look at going through a mid-life review. Look at all those questions around your finances more broadly."

Summing up her advice, Charlotte emphasised "the more you can save the better", especially when starting later in life, but added that saving "little and often" is a very sustainable strategy, reiterating: "It's never too late."

Martin concurred, pointing out that Laura should first examine her workplace pension, assuming she earned enough to contribute to one or save money at all in the first place.

The Money-Saving Expert explained the concept of automatic enrolment, stating: "It means you will save into your workplace pension by default. If you are aged 22 to 66 and earn £10,000 a year you are automatically opted in. The minimum contribution amount is 8% of what you earn, and the employer must contribute 3% to that."

"Let's imagine you are putting in £100 a month of your income as a basic minimum, your employer would need to add £60 on top. You're putting in £100, you're getting £160 in your pension."

For self-employed individuals, Charlotte suggested setting up a personal pension through banks, building societies, financial advisors or specifically recommended: "NEST, national employee savings trust, they are set up to provide low-cost pension savings for the bulk of people. They are a good place to start."

Mihir Choughule, who was also present on the Not the Martin Lewis Podcast, advised people to consider SIPPs, or a self-invested personal pension, noting that compared to more common pension investment options: "The range of choices you get is a lot higher than a stakeholder but the onus is on you to understand."

Martin confessed he would be "slightly nervous" seeing someone at the age of 45 just starting their pension plan with a SIPP, but Mihir reasoned: "In terms of the investment options, if they don't perform at the end of the day you're missing out on a significant amount of growth between 45 and whenever the person decides to retire."

In a summary designed to inform listeners, the founder of MSE said: "If you don't know what you're doing and you're scared, a stakeholder (pension investment) is probably for you but if you want to take control of your money and want wide investment choice you'll probably want to go through a SIPP."