Does this sound right? Seems low

ThomTomato

Can I ask a stupid question? I've read comments on here from people saying it costs £x or x% to manage their pension. Is this the case for company pensions too?

atush

AS I take it, you are contributing 26% of your salary into pesnion- which is good enoigh for your age and situation. But where and how is it allocated?

If you are with say, Barclays, 19 of the 25% will be cash I think- so might not be the way to go long term. You can't change that, but you can save elsewhere in equities, properties and other assets on top.

Revsit in 5 years, but as long as you are looking at other savings elsewhere you are fine on % for you age cohort.

ThomTomato

atush wrote: »

AS I take it, you are contributing 26% of your salary into pesnion- which is good enoigh for your age and situation. But where and how is it allocated? .

I don't know, I pay the max in that I can but I have no idea how it's invested.

If you are with say, Barclays, 19 of the 25% will be cash I think- so might not be the way to go long term. You can't change that, but you can save elsewhere in equities, properties and other assets on to.[/QUOTE]p.
Yes it's with Barclays. So is it a carp scheme then, with a lot invested in cash? Is cash bad? I can change the 3% I think but seems pointless against the 20%

Revsit in 5 years, but as long as you are looking at other savings elsewhere you are fine on % for you age cohort.[/QUOTE]
I've about 10% equity in my home and £1k cash, not a lot to play with right now

ThomTomato

Sorry, my attempts at quotes went wrong

jem16

ThomTomato wrote: »

Can I ask a stupid question? I've read comments on here from people saying it costs £x or x% to manage their pension. Is this the case for company pensions too?

For all money purchase company pensions, yes.

Le_Chuck

ThomTomato wrote: »

What I'm struggling to understand is, (and I understand it's just a 'rule of thumb') the general consensus is that one should contribute 25% of salary to achieve an equivalent of 2/3 final salary scheme. 2/3 of £36k is £24k. I expect my assumptions ate wrong and the forecast is right, just surprised that's all. I am unlikely to stay with current employer until retirement so it's a moot point, but it's just highlighted to me how what sounds like an amazing deal is really just 'ok'

Isn't that with 40 years membership? as you're 32 you won't have that, therefore you won't get 2/3

Lokolo

ThomTomato wrote: »

Yes it's with Barclays. So is it a carp scheme then, with a lot invested in cash? Is cash bad? I can change the 3% I think but seems pointless against the 20%

There are a few bank workers here so they maybe able to give more info. With your pension you should have a number of fund choices to make.

There are some lower risk funds which usually hold a lot of cash. Cash is bad because the interest it gets is not enough to make any money, an infact nowadays, it's losing value because inflation is higher than interest rates.

You want to place more of your pension into equities, so find a bit more of a growth fund where you can put your pension

ThomTomato

Thanks all, I'm going to read up on equities so I fully understand it and look to make some changes. You been a great help
Thom

ThomTomato

Le_Chuck wrote: »

Isn't that with 40 years membership? as you're 32 you won't have that, therefore you won't get 2/3

Good point! I'm certainly not aiming to work until 71, so my expectations were perhaps too high. I'm going to take on board what everyone has said and hopefully get some more growth.

JoeCrystal

Le_Chuck wrote: »

Isn't that with 40 years membership? as you're 32 you won't have that, therefore you won't get 2/3

I guess so. According to this forum's often linked to pension calculator, you could get 66% of your current salary in projected income (in today's term, with +5% increase in pension income every year) starting from zero with forty years of 25% contribution. To get same projected percentage in income with 33 years contribution would requires 44% instead. To be honest, I somewhat surprised by how seven year delay could increase the cost of contribution so greatly.

Frankly. it does not matter about what percentage of your salary in income to aim for by the time you retire. What matter is the level of income required to do so. If you got good idea what kind of income you would like from your pension fund, then change the contribution to the amount that suit the outcome.

I guess that is why it is partly so necessary for pensions to be started early as possible to take advantage of longer time length and hopefully good growth.