UK Markets close in 8 hrs 2 mins

No savings at 50? I’d buy these 2 FTSE 100 stocks in an ISA to help you retire early

Peter Stephens
Senior Couple Walking With Pet Bulldog In Countryside

Having no retirement savings at 50 does not necessarily mean that an early retirement is out of the question. After all, the FTSE 100’s annualised total returns of 9% since inception suggest that investing regularly could produce a sizeable nest egg before the State Pension starts being paid at age 67.

Furthermore, with the index appearing to offer good value for money at the present time, there may be a number of buying opportunities available. Here are two prime examples that could be worth buying in a tax-efficient account such as a Stocks and Shares ISA today. They could help to bring your retirement date a step closer.


The recent half-year results from Morrisons (LSE: MRW) highlighted the challenges facing the supermarket sector. Its like-for-like (LFL) sales increased by a modest 0.2% in the first half of the year and they even fell in the second quarter. However, they were negatively impacted by strong comparables from the previous year. Therefore, the underlying performance of the business may be stronger than the headline figures suggest.

The company continues to invest in its online capabilities. Alongside potential cost savings, this could enhance its financial outlook in an era where digital growth opportunities continue to be high. Alongside this, the company’s wholesale supply partnerships could strengthen its growth outlook and differentiate its business model from many of its supermarket peers.

Morrisons has a price-to-earnings (P/E) ratio of 15 at the present time. While this may be higher than the ratings of some of its retail peers, it is due to produce a 7% rise in its bottom line in the next financial year. With a growth strategy that could lead to improving financial performance and a relatively solid recent track record of profitability in a tough set of market conditions, its long-term outlook may be attractive.


The recent third-quarter update from aerospace and defence company Meggitt (LSE: MGGT) was better than many market forecasts expected. It was able to grow revenue at a faster pace than anticipated, while continuing to see the benefits of its efficiency programme.

This has led to an increase in the company’s financial guidance for the current year. It now expects revenue growth to be 6%-7% for the year compared to a previous range of 4%-6%.

Certainly, the prospects for the wider aerospace and defence industry are relatively challenging at the present time. Risks to the global growth outlook may persist over the coming months and cause investors to demand a wider margin of safety across many of the sector’s companies.

However, with Meggitt currently trading on a P/E ratio of around 17 and forecast to post a rise in its bottom line of 11% next year, it seems to offer fair value for money. As such, now could be the right time to buy a slice of the business for the long term.

More reading

Peter Stephens owns shares of Morrisons. The Motley Fool UK has recommended Meggitt. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2019