Is Final Salary pension be enough when i retire?

davidm1

im on a Final Salary pension, so i can't put more money in.

will it be enough when i retire in 50 years time?

obv i have ISA saving but should i be thinking private pension on top of the FS pension?

Triumph13

You're better placed than anyone else to answer your question.
Take the accrual rate of your scheme (eg do you accrue 1/60th of salary per year), multiply it by the number of years you expect to be working for then multiply it by your salary. Add state pension and compare the resulting number to how much you think you need to live on

davidm1

well that is the thing, because the end figures (about 15k plus state pension) is not something i can add on top, that number is always gonna be the same.

maybe my question should have been 'is it advisable to have private pension on top on FS?

Triumph13

If the scheme is 60ths and 50 years would give you £15k then that would mean you were on £18k now - on which you were paying pension contributions and NI. When you retired you would be on £22.5k with the new single tier pension on which you would NOT have to pay NI or pension contributions (assuming the rules don't change).

You would therefore be much better off in retirement than you are when working. In that scenario it would make very little sense to scrimp even further now to be even richer when you retire.

Pension savings are a gift from your current self to your future self so you need to decide for yourself which of those selves needs the money more.

The key reasons for paying more now would be (i) because you want to retire early, or (ii) as insurance against not having a job with such good pension provision in future.

Daniel54

davidm1 wrote: »

well that is the thing, because the end figures (about 15k plus state pension) is not something i can add on top, that number is always gonna be the same.

maybe my question should have been 'is it advisable to have private pension on top on FS?

No,your pension is going to change in line with your salary

Because pensions lock up your money until you are 55 ( and it may be later by the time you get there ) my preference alongside a final salary pension would be ISAs for regular saving

When you get nearer to retirement you still have the option of starting a personal pension

mania112

50 years time?

Freecall

Wow, you must be one of a select group of 17 year old school leavers who are in a final salary pension scheme.

Rejoice!

:beer:

Triumph13

I think it's rather more likely he's a sensible 20 to 22 year old taking a view on the likely state pension age in 50 years time.

atush

What makes you think you can't add to your FS pension?

Many have AVcs, Buying added pension etc.

On top of that you can: open a PP, buy a home and pay off the mtg, save a cash pot, open S&S isas each year.

ukjoel

Be careful about adding AVC's to a final salary.

I did that a few years back and after two years of poor growth on the AVC fund I tried to remove it and was told the only way I could do it was to move the final salary element at the same time.

It wasn't a massive amount (5k) but was only picking up 3% a year which was significantly under performing my other other pensions.

As I dont want to cancel the final salary scheme I am forced to just let it sit there doing nothing.

I presumed it was due to high fees but was told there are no fees paid on it - its just performed poorly.

What made me want to move was the way they presented the performance was a bit cloak and dagger by comparing last years actual to this years actual (which included a life time bonus) making it look artificially higher than it was.

Agree with previous post - if you have a final salary I would look elsewhere and spread the risk.

atush

Usually with AVCs they are with a company such as Prudential and perhaps you could switch investments within their range to improve performance?

In any case, a PP could be more flexible esp as regards an early retirement