help, my pension figures just don't add us

dunstonh

edit - OP removed first post. Response deleted.

lilybugs

I posted this before lunch but it has disappeared. So here it is again.

I must have these sums incorrect so I hope someone can help me here.

My current pension is worth £21,122.79. I'm working these out on the assumption that I will not pay any further contributions into this fund.

This is from my pension company

This illustration shows the yearly pension payable to you on retirement at 55 years old in 2031.
This is the assumptions:
* no further contributions will be paid into the plan
* the pension is paid monthly in advance for life
* the pension will alter each year in line with changes in the Retail Price Index
* when you retire you will be married to someone who will get 1/5 of your pension payable on your death after retirement

They say my pot will be worth £35,900.

If I was to put the £21,122.79 into a bank account getting a rate of 5% per year, in 2031 the total would be £71,529.26.

So I could have £35,900 from a pension or £71,529.26 from a savings account. Isn't this a no brainer?

BTW, I don't plan to give up work just yet but it might happen in the next couple of years to look after kids.

dunstonh

You are reading the projection wrong. It is using SMPI basis rather than the monetary growth basis you are using.

SMPI deducts 2.5% for inflation in those figures so you get a todays terms value. Monetary growth does not.

Plus, projecting to age 55 would assume a lower annuity than 60/65. For most people, 55 isnt an achievable age to retire.