Pension Contributions

Globemaster

Hi all, I was a watcher, and this is my first post!
After looking on this site, it says as a rule of thumb, your pension contributions should be your age/2. But at what age is this ideally started at. ie 65 = 32.5%, but if you were to start this in your last year then it's pointless. So at what age is this formula decided upon
I am 42 this Sept and have been paying into an NHS pension for 10yrs. The NHS contributes 14% of my salary and I pay 5.3%.
I also pay £150/mth into a private aviva pension that was started when I was 40 and currently save £125/mth (till I'm 60) into an isa which currently has £9000. If I have my figures right, this roughly equals 36% of my salary. I'm planning to retire at 60 with no mortgage.
It works out after a 25% lump sum, that I'll get approx £10,000/yr annuity which doesn't sound alot.
I've not included any state pension in the annuity, incase they don't pay it when I'm 67 anymore.
No one knows how much you'll need when you retire, but does this sound a good plan, or do I need to save more?
Thanks in advance

JoeCrystal

I think you are pretty much settled with NHS pension.... However, you really need to think about how much income you want for your retirement. Only then you would be able to work out how far off you are with the target. You already want something higher than £10,000 as you mentioned clearly it is not enough.

The rule of thumb is really there to give a realistic idea of just how much is needed to pay. Bear in mind you will also be getting state pension as well. You are already saving into an ISA which could be used gap between 60 and your state pension age. Is £10,000 is just from your personal pension scheme or include NHS as well? It is just £10,000 annuity after full lump sum from private pension scheme seems excessive if you are only paying £150 per month.

Cheers,
Joe

Globemaster

My mistake. I missed off my Aviva annuity.
Also didn't include projected lump sums.
NHS lump sum £25,000 @ 60yrs
Aviva lump sum £14,000 @ 60yrs
ISA based on 3% etc £50,000 @ 60yrs old
NHS annuity £10,000 @ 5% growth taken @ 60yrs old
Aviva annuity £3000 @ 5% growth taken @ 60yrs old