how much is in your pension pot and how long have you been putting into it

bendix

C_Mababejive wrote: »

With FSPS..is there an actual personal pension pot or is it simply expressed as an amount you will be paid at a certain age?

The former. I suspect peter is working out what his likely pension will be and 'extrapolating' what it would be worth if it was, indeed, a pension fund.

Given it is non-contributory, I don't think you should take it too seriously. It kind of goes out of the scope of what TWH intended for this thread.

Batchy

im 33 ive only got 14k in a pension (small hey), but for last 12 months and going forward employer is paying in 6k, I will probably go for 3k per annum from April next year (once ive sorted out the ISA's and payrise (hopefully).

But have just spent 35k of my cash buying a house, I consider my house a pension that Ive just capitalised at a fixed value, as who knows what renting will cost in the future, and how do you make sure you provide yourself an income for that purpose. So I took, the housing element out of the pension income and brought, even though it could go down in value. Its the right thing to do. (got a cracking deal too)

So I have four long term plans:-
one is to save into ISA's max out each year
second is all about saving a pension pot, for some council tax food, energy and holidays and luxuries.
Third plan is also to have maxed out premium bonds on retirement. thats going along nicely, 'Won 3 times this year'.
Forth was obviously to buy the house which is now already done (I think its a priority when the going is good, but not in a bubble, personal opinion)

Its not a sprint its a marathon, just pace yourself, once you have a nice fund built up, it will be amazing to see it grow, faster than the contributions you make into it, even on a daily basis.

The plan is to retire early, but as I only do a 9-5 desk job, ill happily go into my late 60s if necessary.

Sometimes life just doesnt work out the way you plan things, so you have to adapt. Fingers crossed I will win a million on premium bonds lol.

PS gf has final salary with government (10 years banked and bound to max out the 40 years as necessary) so its a lot less for me to worry about on that front.

Batchy

C_Mababejive wrote: »

With FSPS..is there an actual personal pension pot or is it simply expressed as an amount you will be paid at a certain age?

its so many 60ths depending on the benefits accrued, it will be based on final salary of employment, and this will determine tax free value. There is a superficial pot of assets, that will pay the accrued and known liability...
Major benefit being it will probably increase with RPI each year, certainly are gold plated.

peterg1965

bendix wrote: »

The former. I suspect peter is working out what his likely pension will be and 'extrapolating' what it would be worth if it was, indeed, a pension fund.

Given it is non-contributory, I don't think you should take it too seriously. It kind of goes out of the scope of what TWH intended for this thread.

It is how HMRC work out the size of the pension fund, even if it may not actually exist as my fund, 20x the annual pension is the size of the 'pot' is the measurement. So it is taken seriously

Batchy

why would HMRC ever work out the size of a pension fund? what interest would it be to them?

lisyloo

Mine's around about £130K and I've been putting in for 20 years.

I really would encurage people to start early.
I have never noticed a penny of the missing income because I've never had it.
Other people upt it off - literally for 20 years and they don't have that £130K.
It's difficult to imagine frittering that amount away on frothy coffees and stuff, but if you don't put it away the money literally dissappears.

Same with mortgages compared to renting.
Mortgagees might pay more and it might be enforced saving, but after 25 years they end up with something significant.
Renters might have paid less, but have nothing to show for it (sweeping generalisation but I'm trying to help xx).

lisyloo

why would HMRC ever work out the size of a pension fund? what interest would it be to them?

Well you can only take 25% of your fund tax free, so there's an obvious tax implication there.

Batchy

lisyloo wrote: »

Well you can only take 25% of your fund tax free, so there's an obvious tax implication there.

true... sorry dizzy moment. lol

peterg1965

Batchy wrote: »

why would HMRC ever work out the size of a pension fund? what interest would it be to them?

Because there is a limit to the amount you can save in your total aggregated pension fund(s) before you begin to very punitive tax rates - it is called the maximum lifetime limit. Currently it is £1.8 million, whilst only a small number of people will be affected it is nevertheless significant. That is why there is a mechanism for working out the size of a non contributory final salary fund, and that is why HMRC ARE interested!

Link...

http://www.hmrc.gov.uk/rates/pensions.htm

cvd

Because there is a limit to the amount you can save in your total aggregated pension fund(s) before you begin to very punitive tax rates - it is called the maximum lifetime limit.

And there is the prospect of a new annual allowance of about £40,000 which you could easily exceed.