Pensions Planning: The NUMBER

Esox

BOBS wrote: »

......

INCOME - state pension £155 x 2 x 52 = £16120
workplace pensions should add up to around £14000 annually

Plus substantial (for us) savings pot for large bills like replacing car , house repairs and holidays.

What have I missed ?

Re state pension, have you had official forecasts?

Only to say, if you've got workplace pensions, is it possible you may have been previously "contracted out".

BOBS

Esox wrote: »

Re state pension, have you had official forecasts?

Only to say, if you've got workplace pensions, is it possible you may have been previously "contracted out".

I had official forecast and assumed hubby would be approx the same.

How would I know if workplace is contracted out. My understanding of all these pension is pretty low - hitting mid 40's and trying to out what we have and what we need to be putting past etc.

I have an old pension from working in NHS for some time about 15 years ago - which is worth around £11k, hubby has several different ones from different factory / construction jobs., I went through some of the paperwork one day plus estimate from current one and reckon he is worth around £14000 a year at retirement age which now seems to 68 for us after recent announcements.

Mnd

I've got Sp2 or serps from years ago, both our figures are official forecasts so I hope they are accurate!

Mnd

The answer to you other point, we got a mix of current accounts, tesco 1 each, tsb 1 each and joint, same with lloyds and a santander 123 to pay the bills

Esox

BOBS wrote: »

I had official forecast and assumed hubby would be approx the same.....

Wouldn't do any harm to get an official forecast for your husband (if only to flush any skeletons out of the cupboard).

The point about being "contracted out" is that it can lead to a reduction in forecast for the new state pension (if you plan to stop working before normal pension age).

Always rings alarm bells when people start quoting the nSP figure (£155) and then mention workplace pensions.

...but sounds like you have had a forecast and there is no reduction, although I suspect that the £155 figure is based on you carrying on to the bitter end as far as working/making NI contributions is concerned, i.e. to normal state pension age.

Did your forecast not give you two figures, one if you stopped working/making NICs now and one if you carried on to normal pension age?

Due to being previously "contracted out" myself, I am in a similar position in that I would need to work for circa an extra 5 years to get a full new state pension.

The "contracted out" reduction issue usually applies to people who were members of some form of final salary pension scheme at some point in their careers (like your NHS one).

A big part of planning for THE NUMBER is knowing when you wish to retire (and we are straying a bit off topic here (again), there are plenty of threads about nSP forecasts).

AnotherJoe

Mnd wrote: »

Here we go,
All our bills, housekeeping fuel etc work out at £1200 at the moment.

My itemised ACTUAL 'basic" spend is £1350/month so we seem to concur.

That is "essentials" all insurances, food, clothes,rates, various insurances and running 2 cars. No mortgage or car purchase payments other than insurance / maintenance / petrol.

So £2500 would give you/ Fatbeetle £1k a month for holidays / eating out / hobbies etc. Seems ample to me, ( IMPORTANT; with lump sum drawdown for "one-off" expenditure such as new car, household major repairs (boiler etc) perhaps a "big" holiday.) If you dont have that fallback then you'd need to fund those out of the £1k a month surplus.

But as said then you also have SP and perhaps private pensions kicking in after a while so you mostly need to bridge the gap.

I dont think private health insurance (have seen that in some budgets here) is worth it, I will self fund if I need anything minor*, and for major things, cancer for instance, the cost of covering that with private is astronomical, usually full of exclusions and the NHS despite what you read or even experience is pretty decent.

* that could be up to and including hip replacement lets say but i can afford that from my cash (and if you cant afford it from cash then paying for it monthly doesnt seem any different to me, eg you cant afford that either)

Mnd

I had a prostate cancer scare luckily false alarm and I was initially treated by NHS, but after cancelled scans etc my wife included me onto her bupa from work, all scans,operations were one consultant and eased the worry considerably so we would consider it.
The big spends..excluding the contents of Next! may need to be financed by equity release. My biggest financial worry is my wife welfare if I pop off..she will have her oap,(probably enhanced)small pension , decent amount of savings and widows pension from my works pension. We have nobody who needs our inheritance and I am quite prepared to use this option if necessary to ensure she will be OK.
Thanks for your comments

arrgee

Gatser wrote: »

The NUMBER is how much income you need to "live comfortably"
So What's your number?

Whatever I can get without paying more than basic rate tax. So £45K/annum at the moment. So in today's money, £45K/annum to age 67 and then £37K/annum (excluding £8K state pension) to 75. After 75 if I haven't squandered the whole lot or moved to Portugal, I will leave whatever is there for the kids and start squandering other savings and sell the house.

atush

How would I know if workplace is contracted out.

If you have a DB pension, it probably would have been contracted out (until recently).

enthusiasticsaver

Sounds good to me MND. We lost private health insurance when my husband retired and have not renewed it. I have controlled hypertension so I am sure they would use this to exclude most health conditions under a pre existing conditions clause anyway. We will self fund if needed as we have a large savings/investments buffer. Never used it when we had it for 30 odd years and from all accounts the premiums are high as you get older.