Have I left it too late to start saving for a pension?

I AM 50 with no pension provision. My employer offers a scheme, but am I too late to start?

SV, Edinburgh

Tom McPhail, head of pensions research at Hargreaves Lansdown, writes:

THERE is no doubt that starting pension saving earlier would have been preferable. But if you are retiring at the age of 65 then you still have 15 years to make contributions, in which time you can build up a substantial retirement pot. This is particularly true if your employer offers to contribute. But even on your own you have enough time to build better retirement prospects. If your employer is still offering a final salary scheme then you should grab it with both hands.

If you were to pay in £200 a month then the government would add £50 in tax relief. If you are a higher rate taxpayer then you would get another £50 paid back to you by the taxman. That could generate an income of around £3,500 at age 65. If your employer paid in matching contributions then you could expect an income of over £7,000.

The alternative is to rely entirely on the state. The full basic state pension is £95.25 a week, plus if you are employed you can probably expect some additional state pension as well. The amount of additional state pension depends on your earnings, but if you have been employed for a full working life it would not be unreasonable to expect several thousand pounds a year. You can get an estimate of the state pension you will receive by visiting www.direct.gov.uk or by calling 0845 3000 168.

If you have a low state pension entitlement then you may qualify for means-tested benefits. This currently guarantees anyone with an income below £130 a week that they will have that income topped up to £130 by the government. If you might fall into this situation the case for retirement saving unhelpfully turns several shades of grey. By increasing your pension income you may be replacing state benefits you would have received had you just spent the money.

However, if you don't save for retirement then you run the risk that the means-testing system won't be there to help you out in 15 years' time.