Pension advise

willywonker

Hi, bit confused by pensions, really think they should teach this sort of stuff at school rather than maths that you never need to use once you've left.

So here's the situation;

I started my pension when I was about 30, I only pay £100 so I appreciate it won't be much (42 now.)

I have been concentrating on paying my mortgage off and hope to have this done by March of next year, in fact with some money I have on credit cards, on paper I don't have a mortgage.

So I am hopefully in a possition where I can start increasing the amount I pay. But how much. What sort of figure do I need to aim for to retire and have a reasnoble amount to live on?

If for example I wanted to have £20000 a year pension, how much do I need to have in my pot when I retire.

The other thing I don't understand is £20000 today won't be worth £20000 when I retire, so what do I really need?

Many thanks in advance for any advice.

atush

Hi, bit confused by pensions, really think they should teach this sort of stuff at school rather than maths that you never need to use once you've left.

Pensions kinda are maths really. You put in money, the govt puts in basic rate tax. Add the two together lol.

The best pension is one your employer pays into- does yours? If they don't they will soon so join it even if you have a PP.

Use this for your calculations. Have ready the amt of your current pension pot (you can call them if you don't have a recent statement)

http://www.hl.co.uk/pensions/interactive-calculators/pension-calculator

Lokolo

http://www.hl.co.uk/pensions/interactive-calculators/pension-calculator

There's a nice calculator here. You can have in Money Terms or you can have in Todays Terms.

You can use advanced tools to change growth and inflation rates.

mgdavid

willywonker wrote: »

......, in fact with some money I have on credit cards, on paper I don't have a mortgage.
.......

small correction, you don't have money on credit cards you have debt on credit cards....

atush

Not actually true.

Twice in my life I have found myself with a balance fo money to spend on a CC. Due to refunds, whatever.

It happens.

But I was also confused by that reference.

Any Debt on CCs or elsewhere apart from a mtg should be cleared before saving anything more from a small emergency pot of a few hundred.

AlwaysLearnin

Poss pre-paid?

willywonker

Sorry for confusion. I did mean debt on credit cards, approx £16000, all 0%, but I also have an offset mortgage and money in the bank which I will use to clear any cards before interest is payable.

Credit card debt £16000
Offset Mortgage £25312
Bank balance £31950

So as far as my mortgage is concerned there are no interest payments at the moment and I pay £1050 off my mortgage each month, so that will clear the balance of the mortgage even if I have to pay all the credit cards off in full by March, this is of course assuming I carry on earning what I have been upto now.

Oddly enough £1050 is also what I will have to pay into a pension if I want to retire at 65 and have £20000 a year to live on, so I will really be no better off, I was hoping to by a boat or something.

Thanks for your help, the calculator was very useful.





32000
21000

atush

A boat or a pension?

Well I guess you can live on your boat when you don't have enough income to run your house?

richbeth

willywonker wrote: »

Oddly enough £1050 is also what I will have to pay into a pension if I want to retire at 65 and have £20000 a year to live on, so I will really be no better off, I was hoping to by a boat or something.

Hi,
2 things, is it £20k pa on top of the state pension or including it ? if the latter then your £1050 could give you £15k pa plus a nice tax free sum of ca £70k, plenty for a nice boat :-) and your income could be ca £22k pa (assuming your single)

if it's £20k plus state pension and you still paid the £100 you do at the moment (so £1150 pm) there's the potential for a smaller cash free lump sum.

Also, no NI on pensions so if you're comparing to a salary you won't need quite the same pre tax income to get the same take home.
R