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  • FIRST POST
    russ311
    How big should my pension pot be ?
    • #1
    • 27th Aug 09, 8:53 AM
    How big should my pension pot be ? 27th Aug 09 at 8:53 AM
    I'm trying to find an easy way to see if I'm on track with my pension. Does anyone know of a calculator that allows me to say (a) how old I am (b) how big my current pension fund is (c) how much I'd like to have when I retire and (d) how old I expect to be when I retire.

    If not then I'm 40 (ish), have a fund of around £35k and would like to retire at 67 with £1000 per month. Can anyone tell me if I'm on target ?
Page 1
  • bendix
    • #2
    • 27th Aug 09, 8:57 AM
    • #2
    • 27th Aug 09, 8:57 AM
    How much do you contribute each month?
  • russ311
    • #3
    • 27th Aug 09, 9:06 AM
    How much do I contribute
    • #3
    • 27th Aug 09, 9:06 AM
    Currently £225 employer contribution with nothing from me but this is increasing to £262.25 from my employer plus £112.50 personal contribution (£374.75 total) from 1st Sept.
  • worto03
    • #4
    • 27th Aug 09, 9:30 AM
    • #4
    • 27th Aug 09, 9:30 AM
    http://www.h-l.co.uk/pensions/pension-calculator

    This might be the sort of thing your looking for?
    • McKneff
    • By McKneff 27th Aug 09, 9:39 AM
    • 34,117 Posts
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    McKneff
    • #5
    • 27th Aug 09, 9:39 AM
    • #5
    • 27th Aug 09, 9:39 AM
    In 27 years time, you'll be able to buy a couple of loaves with £1000 a month.
    No one can make you feel inferior without your consent
  • bendix
    • #6
    • 27th Aug 09, 9:39 AM
    • #6
    • 27th Aug 09, 9:39 AM
    The HL calculator says you're pretty much on track, assuming you get 7% per annum growth. You'll have a pot woth £540k which will give you an income of around £25,000 per annum, but you have to remember that that is in future value money. Given pretty average inflation rates of around 2.5% per annum, that will give you around £12000 per annum in today's terms.

    Personally, I'd be erring on the side of caution and increasing my payments now while you can, to at least matching the employer's contribution.

    At the age of 40, you need to be contributing 15-20% to be safe.
    • dunstonh
    • By dunstonh 27th Aug 09, 9:45 AM
    • 81,005 Posts
    • 46,291 Thanks
    dunstonh
    • #7
    • 27th Aug 09, 9:45 AM
    • #7
    • 27th Aug 09, 9:45 AM
    Your current pension provider will be able to tell you how much you have as a pension fund and how much it could be using example growth rates to a specific age.

    A rough yardstick is £35k by age 35 but that doesnt take into account the fact that some pay less initially and more later etc.

    For income purposes, it is a good idea to use 5% of the fund value as guide to income.

    So,if you want £12,000 a year, that means you take (£12,000 / 5) /*100 = £240,000 investment fund.

    You also need to take inflation into account as £12,000 wont have the spending power at age 67 as it does at 40 (ish). It will probably be closer to around £5,000. So, you need to factor that in as well by increasing the pot value. Of course, investment returns can go some way to cover inflation as well as increasing your contributions with inflation. However, far too many people dont increase their premiums.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • worto03
    • #8
    • 27th Aug 09, 10:13 AM
    • #8
    • 27th Aug 09, 10:13 AM
    I'm only just getting the hang of this myself so correct me if I'm wrong but you should also get your state pension ontop of anything from your company pension which should help too
  • russ311
    • #9
    • 27th Aug 09, 10:28 AM
    • #9
    • 27th Aug 09, 10:28 AM
    Thanks all, it's good to see that I'm not too far off being able to survive when I retire. The calculator provided by worto03 seems particularly useful and easy to use but thanks to all who've responded.
  • marklv
    You'll survive, but make sure you monitor your investments closely. Don't put everything into the stockmarket or you could face a nasty shock - ensure a good portion of your fund goes into gilts/bonds. I also feel a 7% per annum growth rate is a little optimistic.
  • bendix
    You'll survive, but make sure you monitor your investments closely. Don't put everything into the stockmarket or you could face a nasty shock - ensure a good portion of your fund goes into gilts/bonds. I also feel a 7% per annum growth rate is a little optimistic.
    Originally posted by marklv

    He's got 26 years to go before retirement. Plenty of time to ride out a few bumps in the stockmarket.

    At that age, he should be at least 75% in stocks, with a chunk of that overseas and in emerging markets.
  • russ311
    Checking my current pension, the 3 funds that I currently invest in (Axa Global Equity, Axa Overseas and Axa UK Tracker) are showing up 10.9%, 13.9% and 21.4% against cost at last statement so that's fairly positive I guess.
  • marklv
    He's got 26 years to go before retirement. Plenty of time to ride out a few bumps in the stockmarket.

    At that age, he should be at least 75% in stocks, with a chunk of that overseas and in emerging markets.
    Originally posted by bendix
    It depends on one's risk tolerance. Personally I would go 50% global tracker, 50% gilts.
    • Paul_Herring
    • By Paul_Herring 27th Aug 09, 7:43 PM
    • 5,944 Posts
    • 2,670 Thanks
    Paul_Herring
    I'm only just getting the hang of this myself so correct me if I'm wrong but you should also get your state pension ontop of anything from your company pension which should help too
    Originally posted by worto03
    Depends. Do you think there'll be a non-trivial (non-means tested) state pension when you retire?

    I'm doing my planning assuming there won't be in 30 years time. If there is it'll be a nice surprise.
    Conjugating the verb 'to be":
    o I am humble
    o You are attention seeking
    o She is Nadine Dorries
  • marklv
    I reckon the state pension will soon cease to exist as anything except a safety net for the poor. I believe Cameron is already planning to get rid of it.
    • JoeCrystal
    • By JoeCrystal 27th Aug 09, 9:23 PM
    • 1,081 Posts
    • 584 Thanks
    JoeCrystal
    Indeed, that why I reckon it would be even more vital for people who have their own pensions. Which is why I am looking into having one starting from this January.
    • dunstonh
    • By dunstonh 27th Aug 09, 11:14 PM
    • 81,005 Posts
    • 46,291 Thanks
    dunstonh
    I reckon the state pension will soon cease to exist as anything except a safety net for the poor. I believe Cameron is already planning to get rid of it.
    Originally posted by marklv
    I reckon that may end up being the case or something along those lines with the second state pension over the long term. I think the basic state pension is pretty safe though.

    Pension credit is more likely to go first though. Although ironically it may end up be raises in the basic state pension that take care of that.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • marklv
    I doubt all this. I think the state pension will simply become another benefit, like JSA or disability benefit and become fully means tested.
    • dunstonh
    • By dunstonh 27th Aug 09, 11:38 PM
    • 81,005 Posts
    • 46,291 Thanks
    dunstonh
    I doubt all this. I think the state pension will simply become another benefit, like JSA or disability benefit and become fully means tested.
    Originally posted by marklv
    The move to state pension age to 68 is a reduction. That is likely to get extended to 70. Each increase in age reduces the draw on the pot that allows them to keep it running.

    You never know, if obesity continues as it has been going then a good proportion of the UK population arent going to make it to retirement and we could see life expectancy fall.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • marklv
    The move to state pension age to 68 is a reduction. That is likely to get extended to 70. Each increase in age reduces the draw on the pot that allows them to keep it running.

    You never know, if obesity continues as it has been going then a good proportion of the UK population arent going to make it to retirement and we could see life expectancy fall.
    Originally posted by dunstonh
    Well, moving the goalposts is the same as abolishing goals! They might as well move the state pension age to 80.
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