pension worries

slade1961

as i am new to this forum please forgive any noobiness .
my question is i have 3 pensions transfer value to date
pension 1 = 12, 466.private
pension 2= 24,637.private
pension 3 = 5,185 stakeholder
serps = 25,861

as i understand it the serps is my state 2nd pension on my state pension forecast , is that correct?
are my pensions adequate or not ?
my age 48
contributions per mth 150.
these are cis pensions .
please any advice would be grateful.

bendix

Putting aside your serps, you have personal pension pot of around £42000 which, while not great, is probably better than many people. At 48, though, you should really be ramping the contributions up because - if you retire at 65 - you only have another 204 monthly contributions to make before you need the money. At current contributions, that is another £30k. With growth etc you might end up with a pot of around £100,000 at sixty-five, possibly £120,000.

Not too shabby, but remember that is in today's money. And at today's rate, that would buy you an annuity of around £7000 per annum, assuming you took no cash free sum from it.

So the question should be directed back to you. . is that enough for you?

marklv

slade1961 wrote: »

as i am new to this forum please forgive any noobiness .
my question is i have 3 pensions transfer value to date
pension 1 = 12, 466.private
pension 2= 24,637.private
pension 3 = 5,185 stakeholder
serps = 25,861

as i understand it the serps is my state 2nd pension on my state pension forecast , is that correct?
are my pensions adequate or not ?
my age 48
contributions per mth 150.
these are cis pensions .
please any advice would be grateful.

In my opinion you need to increase your contributions significantly. You mention that you pay £150 a month, but fail to provide detail as to whether this is net or gross contribution, and also what your employer contributes. At your age you should aim to contribute 20-25% of salary between you and your employer's contributions. I know that sounds a lot, but anything less and you won't get much to live on when you retire.

bendix

Perhaps, but look at it this way. With 42,000 in already and 17 years to retirement, that pot can grow to over £110,000 with 6% per annum growth. That is without taking into account any future contributions at all, irrespective of whether they are net or gross. With £150 per month gross (that's over 200 monthly payments), the pot could be closer to £140k.

OK, it's not a fortune but it is likely to be much better than the average pension pot.

Given his tax concerns (see another thread), my strong inclination would be to continue his current pensions saving plan, but add extra into the generous tax free ISA wrappers to supplement the pension pot.

But in one regard, you're certainly right. More is always better.

DD4

The OP actually has £68k in pensions savings, including his serps (I assume he contracted out and by 'SERPS' he means his Protected Rights that were built up by contracting out).

If we assume 6% growth over 17 years, then he'll double his current pot and then some, but let's say it makes £150k. If he takes 25% tax free lump sum (£37,500) which leaves £112500. This could pay an annuity of £6k which, coupled with his state pension, will take him over the £10k age related tax free allowance.

If the OP wants to make his retirement as tax efficient as possible, then he should stop paying into his pensions now and start maxing out his S&S ISAs. If his pensions don't do as well as expected, he can always top them up later.