L&G Pension Review

fkerr

I am in a compay pension scheme with L&G (60:40) Index Lifestyle Strategy. My contribution is 5% matched by my company. I am also adding 4% via AVCs. The total contributions to date are £11,273 and the fund value is £13,765. Is this a good return, i've been in the scheme since Dec 2006. I am 27 and earning £26k pa, is this a good contribution so far and should I consider increasing my AVC or starting my own personal pension. Any advice would be appreciated.

Fraser

JoeCrystal

Well, there is HL pension calculator often used on this forum to figure out if your contributions is sufficient enough to provide the potential income you want when you retire.

I entered the details (Personal contribution: 9% Employer contribution: 5%) you mentioned in and assuming that you retire at 65, assuming different occurrences, you may have the total pension fund worth £313,952.86, giving an projected income of £13,703.14 per year.

Which is reasonable good. I wonder if your company pay in more if you increase your contribution which may be worth doing.

vbm

Right on track.

14% Contribution at 27, lifestyle with a low charge tracker fund, exposure to UK and global equity.

Cant see any need to increase pension saving, if you have any spare, Cash or S&S ISA might be a better place to put it.

CLAPTON

sadly one has to question whether growth of 7% pa and inflation of 2.5% pa are realistic assumptions

webnibbler

The HL Pension Calculator, and other similar calculators, are useful. But the default annual growth rate is set at 7%. With recent market turmoil can this really be the expected return? I think a figure of 5% - 6% is more realistic. Call me pessimistic but I would rather plan this in and project at a growth rate of 5%, which can be done on the HL calculator by clicking on ‘advanced options’.

vbm

Well if he is saving for an event 35 years away I would argue that 7% is about right. The average performance of equities over that period accoridng to the Barclays Equity Gilt Study show real returns over 20 years are about 4.6%, 50 years about 5.2%.

Also the default charge on the HL calculator is 1%, where OP would be paying considerably less than that, in an L&G GPP