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

lisyloo

Wow you are all so lucky!!

I don't see much down to luck here.
Some people (not me) decided to make big sacrifces in return for delayed gratification. That's not luck that's a conscious decision and plan.
You make a conscious decision to go travelling - good for you - I admire that too.

But I see no luck in it (apart from death/sickness of course).
People have got to where they are through conscious decisions.

I have seen the effects of putting off a pension.
Some people think they'll do it later.
20 years down the line they've done nothing.
On the other hand some people that have made sacrifices and now have £700K.

You are the master/mistress of your own destiny.
I don't belive in luck apart from "the harder I work the luckier I get".

savingforoz

lisyloo wrote: »

I don't see much down to luck here.
Some people (not me) decided to make big sacrifces in return for delayed gratification. That's not luck that's a conscious decision and plan.
You make a conscious decision to go travelling - good for you - I admire that too.

But I see no luck in it (apart from death/sickness of course).
People have got to where they are through conscious decisions.

I have seen the effects of putting off a pension.
Some people think they'll do it later.
20 years down the line they've done nothing.
On the other hand some people that have made sacrifices and now have £700K.

You are the master/mistress of your own destiny.
I don't belive in luck apart from "the harder I work the luckier I get".

Puts it in a nutshell, I think.

pineapple

Fair point but I also think some people are fortunate in that they have earned salaries enabling them to save. Or have money from other sources through being able to share household costs with partners for example. As a single female earning around £10 per hour on a 3 or 4 day week - frankly that's barely enough to pay all the bills.
I do though count myself lucky that I will be able to draw my state pension at just over 60. Aren't there plans to make it 70 or more? In which case those starting employment now will really need to have their noses to the grindstone.

Rainmaker_uk

pineapple wrote: »

Fair point but I also think some people are fortunate in that they have earned salaries enabling them to save. As a single female earning around £10 per hour - frankly that's barely enough to pay all the bills.

I think that this illustrates the point very well...

If it is not enough to pay the bills then it is up to her to change things.

Find a way to earn more. This could be through changing job, upskilling, learning, networking, starting their own business etc etc

The opportunities that are there are there for everyone. Some might even view this lady's position as eviable as it is often the fact that people are comfortable that stops aspirastion. In this case she is unhappy and potentaily ripe for action.

On the other hand she could sit in this position for the rest of her life blaming her hand in life and say 'what can I do about it?'

The question is really 'What do you expect us to do about it?'

rjhand

It's bopth interesting and slightly intimidating reading some of your replies. Some folk have not yet started, others have amassed very substantial 6 figure sums.

I have recently been speaking to my finacial advisor and his view of what I thought was a reasonable amount 'pot' right now, has unnerved me somewhat.

I am 38 and have been contributing to my pension since starting work 14 years ago. I have also been buying and developing propoertiews and now have 5, a total value of c. £1.5m, equity around £700k. Coupled with raising a family and a wife not earning, I was quite proud of having amassed a pot of £83k. It seems this is 'way short of the mark' according to my advisor and should be nearer £250-£300k!

Can anyone reassure me or, worse, confirm the advisor IS right and I need to knuckle down?

Thanks

sandsy

rjhand wrote: »

It's bopth interesting and slightly intimidating reading some of your replies. Some folk have not yet started, others have amassed very substantial 6 figure sums.

I have recently been speaking to my finacial advisor and his view of what I thought was a reasonable amount 'pot' right now, has unnerved me somewhat.

I am 38 and have been contributing to my pension since starting work 14 years ago. I have also been buying and developing propoertiews and now have 5, a total value of c. £1.5m, equity around £700k. Coupled with raising a family and a wife not earning, I was quite proud of having amassed a pot of £83k. It seems this is 'way short of the mark' according to my advisor and should be nearer £250-£300k!

Can anyone reassure me or, worse, confirm the advisor IS right and I need to knuckle down?

Thanks

The way I see it is that there are many different ways of providing for an income in retirement. And certainly, your property investments shuld be considered to be part of the bigger picture in your retirement planning - whether they provide rental income or whether you sell them and capitalise the income. I think it would be naive not to consider them in this way. Whether it's the most tax efficient way is debateable. I guess the key question is how they perform as investments relative to the alternative of investing in traditional pension vehicles and the tax advantages associated with traditional pensions saving.

LilacPixie

Been contributing for almost 8 years now, i'm 29 but have no idea how much is in the 'pot'. TBH the pension statement is something I tend to file to look at when I have time and the time never seems to come. I pay £150pm and employer matches that amount so not a great deal.

Loughton_Monkey

rjhand wrote: »

It's bopth interesting and slightly intimidating reading some of your replies. Some folk have not yet started, others have amassed very substantial 6 figure sums.

I have recently been speaking to my finacial advisor and his view of what I thought was a reasonable amount 'pot' right now, has unnerved me somewhat.

I am 38 and have been contributing to my pension since starting work 14 years ago. I have also been buying and developing propoertiews and now have 5, a total value of c. £1.5m, equity around £700k. Coupled with raising a family and a wife not earning, I was quite proud of having amassed a pot of £83k. It seems this is 'way short of the mark' according to my advisor and should be nearer £250-£300k!

Can anyone reassure me or, worse, confirm the advisor IS right and I need to knuckle down?

Thanks

You can get a fairly accurate view yourself, by simply looking at annuity rates. For a 60 year old male it is roughly 6%. For a 65 year old, it is 6½%. So what income do you want when you retire? Just write it down, and divide by 0.065 (e.g. for age 65), and that will tell you roughly the amount of dosh you need to support that income.

The far more complex thing, as alluded to by others, is to decide how best to provide that fund. There are lots of things to consider.

- Investing in Property may well be more lucrative than investing in pensions, but there are huge tax differences.

- Every £100K in your pension pot would pay £6,500 per year taxable. Every £100K in saved cash is available to you without further tax liability (except on investment income from it).

The very generous tax relief on pensions tends (in my opinion) to make them the best bet for most people. I have retired early with enough pensions to pay about 70% of what I spend, and enough cash (I hope) to fund the other 30%.

Relying on any sort of cash to 'drip feed' spending in retirement is all very well, but has swings and roundabouts. Die early, then at least the cash is there for your heirs. With pensions, it generally isn't (excepting guarantee periods and/or widow pension elements). On the other hand, if you live longer than 'expectations' then your cash runs out, but your pension wouldn't.

So best advice is to think it all through (with or without your advisor) and draw up some sort of retirement plan that is right for you. Don't know, but I would imagine that part of that would dictate bunging a little bit more than you do into a pension.

bendix

lisyloo wrote: »

Whilst I greatly admire what Bendix has done, it may not be the best model for most tradionally employed people e.g. people whose employers offers pension contribution matching.

If your employer adds to your pension you are better off taking advantage of that whenever it's available (this means each year).
If you pay higher rate tax you are better off claiming the relief whenever you can (this means each year).

I suspect Bendix has not been traditionally employed and either been self-employed or running businesses which may well change the whole tax regime.
It's absolutely not a criticism as what he/she has done sounds great. I'm just pointing out that a similar system may not work for everyone.

I've been traditionally employed, but not in a position to benefit from the UK tax breaks and/or employer contributions because from the age of 26-44 I was only working in the UK for two year - the rest of the time was in NZ, Australia and Asia.

So most of my 'retirement saving' had to be in the form of 'cash' or liquid savings from which I got no employer contribution nor any tax break. Through a combination of luck, sacrifice, discipline etc I've built that liquid sum to around £480-£500k depending on exchange rates.

Then, eighteen months ago, I decided I should take advantage of the UK tax breaks on pension contributions so headed back home to build the final stage of my pension, outlined above.

My approach is consistent with my strategy that my approach to retirement is based on having my living space paid for, a significant (and growing) and growing cash sum which will generate enough income to finance my semi-retirement from the ages of around 48/49 - 55, at which point my pension pot (hopefully around £200-£250k by then) will kick in to provide enough for total retirement at 55.

Domain.Rider

Having just retired at 55, I can give a post-hoc view, although the rule changes may make it less applicable. I'm single, and haven't moved from the small house I bought in '87, which meant I was able to pay off the mortgage by age 50. I was in a job with a FS pension for 13 years, which now gives me £13.5k pension income.

I knew I wanted to retire early (I was planning on 57, but circumstances forced my hand early), so from about age 40 I was putting everything I could into the company AVC scheme and anything left over into ISAs, NSI Savings Certificates, etc. I also had a £75k pension pot from a previous job which I transferred into the AVC scheme because the management was better and the charges were much less (0.5% vs 1.5%). Although I was a higher rate taxpayer, I lived a relatively quiet lifestyle, which meant I had enough surplus each month to save. It's amazing how it builds up over 15 years...

By the time I left, the AVCs were worth around £170k, which could give me around £9.5k pa with a straight annuity, or a little less if invested for income. This works out roughly around £21k to £23k pa total retirement income (depending on the annuity/investment option chosen), which, at present, is comfortable for me.

The ISAs, savings certificates, shares, and sundry other savings are an additional buffer for emergencies and potentially for future income.

The point is to decide what you want to do for the future, and then to use whatever opportunities you get to try and make it happen. Obviously, if you don't have the income, your opportunities are limited, but if you want to raise a family and have a comfortable retirement, you'd better have a well paid job (and/or inherit money or property)!

Now I don't feel guilty about posting late into the night, because I don't have to get up early tomorrow ;-)