Rule of thumb?

guitarman001

What's the rule of thumb for how much you should have in a pension for a particular age? I KNOW, it depends on the lifestyle you want in retirement etc... but there must be some sort of average rule of thumb? Is £15k in late twenties ok? Sounds poor to me!

dunstonh

It is difficult to come up with any figure as a late starter may have a larger contribution and a steeper line than an earlier starter with a smaller amount. The £35k by age 35 is really only a guide to get people thinking of what they should realistically have.

£15k in late 20s is low by historic standards (relative to real money terms) but in these days of don't-care-until-its-too-late it isnt too bad as long as the current contribution is realistic.

atush

Are you putting in half your age by %?

Do you raise your contributions either each year or each time your salary is raised?

Do you save outside your pension into other tax wrappers is Isas?

kidmugsy

guitarman001 wrote: »

What's the rule of thumb for how much you should have in a pension for a particular age? I KNOW, it depends on the lifestyle you want in retirement etc... but there must be some sort of average rule of thumb? Is £15k in late twenties ok?

I have a child of roughly that age. The student loan has been paid off, and now saving for a deposit for a house is ramping up. Pension saving has taken a back seat so far. When I last raised the issue of pensions I was told "nobody my age worries about that". Later the same weekend I was asked "should I buy shares, all my friends seem to be doing it?". Heavens above!

So £15k seems a decent effort to me. Your alternative is to get a job with a Final Salary pension. That nearly always means seek employment from an arm of the government - and then pray that future governments don't renege on the accrued benefits. Whether that's a great risk to take is unknowable.

guitarman001

I only started contributing from around 2009, so for about 4 years. £3-4k of student loan left, have got enough for a house deposit (if I even want that), I'm contributing each month, as percentage of gross, roughly 11.5%. Final salary pension - I WISH! With (poisonous) rising house prices, pensions take a back seat for all my friends.

atush

Sounds like you are doing ok then, but i'd increase both pensions and S&S ISa savings every time you get a raise.

somethingcorporate

I'd suggest it's better than most but worse than some.

I have around £40k in my pot (age 29) but have a generous employer contribution (9% and I contribute 11% so it is going up around £10k per year).

guitarman001

Wow, that IS a large contribution! Well done!
I have £43kish in savings, unfortunately just not in the pension!
I think a lot of people still think their house is their pension

kidmugsy

guitarman001 wrote: »

I think a lot of people still think their house is their pension

When they all come to sell at much the same time, that may not look such a good idea.

dano17439

me and my wife are both 38 and have around 90k spread over a number of pension pots. To some it may seem a nice amount but the general rule of thumb ive always believed rightly or wrongly that to have a yearly pension income of 15k you need approx 300k in your pot.

So another 510k to save then for me and the mrs.......

guitarman001

I know exactly what you mean. Poor pension coupled with crippling housing cost = worried old me!