Am I paying enough in???

gadgetmind

Starbrite wrote: »

Just been on a pension calculator and to have a target pension of £20,454 or £1488 a mth I need to pay in £1100 a mth!!

Which calculator did you use? Also, bear in mind that the £1100 is gross, so less that £900 for a basic rate tax payer, which is far more achievable. There is also state pension to take into account, so maybe just £600 a month? Also bear in mind that you get a higher personal allowance in retirement, and no NI, so you might not need as much income.

Give us the facts and we can help you tackle this. But if you don't want to live on £400pcm in retirement, you will need to start saving now. Sorry!

I have no idea how much this will be in tomorrows money, not sure if anyone does tbh.

No, they don't, so ignore it. Work in today's money as you have no way of knowing what inflation will be.

Procrastinator333

Starbrite wrote: »

It's all so scary and worrying!

Scary and worrying is having such thoughts at the age of 60-65. Having them at 34 is a arriving a little late, but there is still time to have a decent income in retirment by the time you get to 65 or 70 and retire in reasonable comfort (As long as you take action that is).

If you can't bump up your contributions now, my advice would be to start seeing a payrise as an opportunity to bump your pension. Get a 3% payrise, put 3% or at least 2% of it in to your pension (or some retirement provision). Keep doing that for a few years and you will soon be making a serious contribution.

If you are not a HR taxpayer and your employer won't put any more in, then have a think if pension or ISA will be a better bet for yourself.

Good luck with it all.

atush

Increasing any and all savings on the day a new pay rise starts is a no brainer as once you get used to that extra dosh you will spend it. Pay it into savigns (pension, savings etc) immediately mean you just keep going on as normal but end up saving a lot more. The apportioning of that extra money into Short, long term savings and pensions will depend on personal circumstances.

mania112

nevermind.

Shimrod

Procrastinator333 wrote: »

If you can't bump up your contributions now, my advice would be to start seeing a payrise as an opportunity to bump your pension. Get a 3% payrise, put 3% or at least 2% of it in to your pension (or some retirement provision). Keep doing that for a few years and you will soon be making a serious contribution.

I would second this as a method of increasing pension payments. I've been doing this for a couple of years, since my company changed from a final salary to a defined contribution scheme. As long as you don't have the money in your net pay in the first place, it doesn't seem so painful to give it up.

Starbrite

Shimrod wrote: »

I would second this as a method of increasing pension payments. I've been doing this for a couple of years, since my company changed from a final salary to a defined contribution scheme. As long as you don't have the money in your net pay in the first place, it doesn't seem so painful to give it up.

Yes I agree with that alas in my whole working life I think I've had about 5 pay rises! I seem to miss out on them, only way I have been paid more is to find a higher paying job!

Right into the calculator I put, my yearly wage 23880 (before the tax man), my age 35, what I have so far saved 1,200, retirement age 60 and to get a projected income of £23,845 I need to put £1249.23 away each mth.... Or £801.47 if I retire at 65....

Maybe I'm aiming a bit high here.... Who knows I don't know how much I will need to buy my wool for knitting, sherry for a sneaky tipple and flights to wherever I didn't get to see in my working years, and as for my Yacht who knows how much a sunseeker will be then and if ebay will still be going.....

I used this Calculator.. http://www.hl.co.uk/pensions/interactive-calculators/pension-calculator

£400 a mth gives me £13,258 a year.... How do you know how much will be enough? I imagine if I could answer that I'd have a crystal ball right?

gadgetmind

Starbrite wrote: »

to get a projected income of £23,845 I need to put £1249.23 away each mth.... Or £801.47 if I retire at 65....

Let's first look at that £23845. After state pension age, you will have a larger personal allowance(1), and you won't be paying NI, so you'll need less on your top line to get the same take home. You may also have lower bills due to not having to pay for mortgage, kids, commuting, etc. So, work out what you will need PCM and then work back to what gross figure you need to get this.

You can then deduct the state pension from this. Do you have a forecast? Get one, it's free! You should then (hopefully!) have a more achievable figure what you needs to be going into a pension each month.

If your employer won't contribute anything, it's all down to you. but remember that for every £100 going into a pension, it costs you only £80.

If that £400 a month proves to be right (it doesn't look far off to me), then it will *only* cost you £320 pcm. This may look like a lot, but think long and hard of a life where you can't retire until 66/67(or more!) and only get a state pension of £5k to £6k per annum.

(1) You can also get 25% tax free from your pension at age 55 and do sneaky tricks like *careful* recycling, and then get more tax free, and all the tax free can be invested in ways that get you tax free income. However, I prefer to ignore such tricks when planning contributions as it's better to have "slack" and potential "upside".

gadgetmind

Let's first look at that £23845. After state pension age, you will have a larger personal allowance(1), and you won't be paying NI, so you'll need less on your top line to get the same take home. You may also have lower bills due to not having to pay for mortgage, kids, commuting, etc. So, work out what you will need PCM and then work back to what gross figure you need to get this.

You can then deduct the state pension from this. Do you have a forecast? Get one, it's free! You should then (hopefully!) have a more achievable figure regards what needs to be going into a pension each month.

If your employer won't contribute anything, it's all down to you. but remember that for every £100 going into a pension, it costs you only £80.

If that £400 a month proves to be right (it doesn't look far off to me), then it will *only* cost you £320 pcm. This may look like a lot, but think long and hard of a life where you can't retire until 66/67(or more!) and only get a state pension of £5k to £6k per annum.

(1) You can also get 25% tax free from your pension at age 55 and do sneaky tricks like *careful* recycling, and then get more tax free, and all the tax free can be invested in ways that get you tax free income. However, I prefer to ignore such tricks when planning contributions as it's better to have "slack" and potential "upside".

Starbrite

gadgetmind wrote: »

Let's first look at that £23845. After state pension age, you will have a larger personal allowance(1), and you won't be paying NI, so you'll need less on your top line to get the same take home. You may also have lower bills due to not having to pay for mortgage, kids, commuting, etc. So, work out what you will need PCM and then work back to what gross figure you need to get this.

You can then deduct the state pension from this. Do you have a forecast? Get one, it's free! You should then (hopefully!) have a more achievable figure what you needs to be going into a pension each month.

If your employer won't contribute anything, it's all down to you. but remember that for every £100 going into a pension, it costs you only £80.

If that £400 a month proves to be right (it doesn't look far off to me), then it will *only* cost you £320 pcm. This may look like a lot, but think long and hard of a life where you can't retire until 66/67(or more!) and only get a state pension of £5k to £6k per annum.

(1) You can also get 25% tax free from your pension at age 55 and do sneaky tricks like *careful* recycling, and then get more tax free, and all the tax free can be invested in ways that get you tax free income. However, I prefer to ignore such tricks when planning contributions as it's better to have "slack" and potential "upside".

Work pay £100 a mth at the moment in each mth...

So if I put £320 a mth in after xmas, as thats when £200 a mth will become freed up... that along with the tax man bit and works £100 I should be ok ish? as long as I keep this up forever and add any "extra" monies ie bouns, and lotto win...

What happens when I have kids? if I was to have any? (not decided yet and need to find a man!!!!)

Not actually looked into what I will get state pension wise as I don't think there will be anything left in the pot when I get there, and if there is, lets be honest it isn't much is it!

I guess I'm doing better than some and a whole lot worse than others... It's not really something you talk about with your peers so you know what a normal amount to pay in is..

Thanks for you help everyone

fairleads

Starbrite wrote: »

Having kittens here... Ok I left it rather late to start up a pension, I did look into these at 25 yr's old but clubs, pubs, parties etc etc got in the way next thing I know I was 34 and still pensionless, So after watching a tv show in Jan/Feb time this year about pensions and pensioners etc I realised I had to do something..... So a quick google search I opened a pension..

Having since found this forum and it's wonderful catalogue of information, I have become aware of pension calculators etc etc

Just been on a pension calculator and to have a target pension of £20,454 or £1488 a mth I need to pay in £1100 a mth!! I have no idea how much this will be in tomorrows money, not sure if anyone does tbh. But I do know I don't want to be a poor pensioner and would like to buy a yacht and sail the seven seas rather than sit at home awaiting meals on wheels to turn up... Ok health permitting...

All I know is I can't afford to pay in £1100 a mth. At the moment I'm paying in £100 and my company pay in £100 then theres the £25 from the tax man. I'm looking at putting £300 a mth in after Jan time. I know its a stupid question a bit like how long is a piece of string but do you think this will be enough?

What is the average amount people pay into their pensions a mth? I know it should be half your age in % of your salary in my case £400 ish... But Trying to save a deposit for a home at the moment and I guess when I'm 60 I could sell my house down size and use the left over monies towards pension? If there is any left overs monies and I have a house to sell, Big IF!

Just having a omg I'm going to be poor moment:(

Contribution of 350 per month (440 gross with tax relief) invested at 5.5% real rate of return should, in 26 yrs time, provide a pot of 300K which in turn should provide an annual after tax income of around 15K p/a. All figures are in today's money so to inflation proof your investment you would need to increase your contribs by the rate of inflation.