how much is usual to have in your pot by say, early 30's and early 40's

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The_White_Horse
The_White_Horse Posts: 3,315 Forumite
in Pensions, annuities & retirement planning
i know it is dependant on what you earn (and how it grows over time), but broadly speaking if you are say, 30 now - what would you need in there to have a decent pension at 66?

TWH
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  • dunstonh
    dunstonh Posts: 116,596 Forumite
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    edited 8 April 2011 at 11:31AM
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    The one guide that rolls off the tongue is the aim to have £35,000 in a pension by age 35. Its just one of those "make you think sensibly" guides as to what you should be aiming for. A bit like taking your age and halving it as what you should pay if you have no previous provision. It doesnt mean its right. Its just a guide to let you know whether you are in the ballpark and being realistic.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • butterfly72
    butterfly72 Posts: 1,222 Forumite
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    dunstonh wrote: »
    The one guide that roles off the tongue is the aim to have £35,000 in a pension by age 35. Its just one of those "make you think sensibly" guides as to what you should be aiming for. A bit like taking your age and halving it as what you should pay if you have no previous provision. It doesnt mean its right. Its just a guide to let you know whether you are in the ballpark and being realistic.


    So does that mean 40K at 40, 45K at 45? Doesn't seem an awful lot by 65! What would 65K at 65 get you per annum?

    How much would you need in your pot for every 10K of annual pension? I know it depends on so many other variables... but roughly?
    £2019 in 2019 #44 - 864.06/2019
  • ffacoffipawb
    ffacoffipawb Posts: 3,593 Forumite
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    dunstonh wrote: »
    The one guide that roles off the tongue is the aim to have £35,000 in a pension by age 35. Its just one of those "make you think sensibly" guides as to what you should be aiming for. A bit like taking your age and halving it as what you should pay if you have no previous provision. It doesnt mean its right. Its just a guide to let you know whether you are in the ballpark and being realistic.

    And for the forties, say £135k at 45 is probably reasonable (would buy a £7k pension in today's terms)
  • Linton
    Linton Posts: 17,237 Forumite
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    butterfly72 wrote: »
    ....

    How much would you need in your pot for every 10K of annual pension? I know it depends on so many other variables... but roughly?

    At 65 if you wanted it index linked - £300K, if level - £140K

    That gives you some idea of the real value of state and final salary pensions.
  • butterfly72
    butterfly72 Posts: 1,222 Forumite
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    Linton wrote: »
    At 65 if you wanted it index linked - £300K, if level - £140K

    That gives you some idea of the real value of state and final salary pensions.

    wow. I've just bought 1K of additional NHS pension for just over 10 grand. Makes that sound like good value!
    £2019 in 2019 #44 - 864.06/2019
  • jh2009
    jh2009 Posts: 362 Forumite
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    dunstonh wrote: »
    The one guide that roles off the tongue is the aim to have £35,000 in a pension by age 35. Its just one of those "make you think sensibly" guides as to what you should be aiming for. A bit like taking your age and halving it as what you should pay if you have no previous provision. It doesnt mean its right. Its just a guide to let you know whether you are in the ballpark and being realistic.

    If this £35,000 figure looks daunting then remember it is NOT just contributions made by yourself but this figure would also include:

    1. Tax relief (20% for a basic rate tax payer).

    2. Any employers contributions.

    3. Any investment returns.

    All of the above then say that:

    1. If your company offers you a scheme with any sort of contribution, then they are paying part of your retirement provision.

    2. The earlier you save, the longer you have for investment returns, and hopefully the bigger the pot.

    3. The better the investment performance, the higher your pot.

    4. You only pay 80% of your contribution if you are a basic rate taxpayer so 20% of what you pay is funded by the government.

    So if you start young and join a company scheme making an employers contribution, a £35k pot at 35 isn't unachieveable.
  • Spartacus_Mills
    Spartacus_Mills Posts: 5,545 Forumite
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    butterfly72 wrote: »
    wow. I've just bought 1K of additional NHS pension for just over 10 grand. Makes that sound like good value!

    It is, especially if it is index-linked as well.
    "There's no such thing as Macra. Macra do not exist."
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    "The Centuries that divide me shall be undone."
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  • dunstonh
    dunstonh Posts: 116,596 Forumite
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    So does that mean 40K at 40, 45K at 45? Doesn't seem an awful lot by 65! What would 65K at 65 get you per annum?

    No. Its just a figure that happens to more or less fit with that age. It increases much faster every 5 years thereafter.
    How much would you need in your pot for every 10K of annual pension? I know it depends on so many other variables... but roughly?

    About £300,000 would be a fair guide in todays money. (Linton beat me to it)
    wow. I've just bought 1K of additional NHS pension for just over 10 grand. Makes that sound like good value!

    Yes. Now say thank you to all the taxpayers here for helping to fund your retirement ;)
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • bilbo51
    bilbo51 Posts: 519 Forumite
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    Linton wrote: »
    At 65 if you wanted it index linked - £300K, if level - £140K

    That gives you some idea of the real value of state and final salary pensions.
    Or more if you're a woman.
  • hugheskevi
    hugheskevi Posts: 3,900 Forumite
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    Originally Posted by butterfly72 viewpost.gif
    wow. I've just bought 1K of additional NHS pension for just over 10 grand. Makes that sound like good value!
    It is, especially if it is index-linked as well.
    Without knowing the OPs age, how can you determine the value?

    If OP is 59, it is fantastic value. If OP is 18 it is pretty lousy.
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