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A formula for pensions

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On this thread ( I think) someone gave a formula for what you should put into your pension based on your age. I think it was if you were starting a pension. Anybody know or remember it. Also if you know what your current pension pot is or predicted to be, can you include that into the calculation to see what you should be saving each year as a pension.

Comments

  • whizzing
    whizzing Posts: 294 Forumite
    Does your family get back what is in your pot if you die before you retire.
  • whizzing
    whizzing Posts: 294 Forumite
    Does your family get back what is in your pot if you die before you retire.
  • dunstonh
    dunstonh Posts: 119,617 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Does your family get back what is in your pot if you die before you retire.

    yes.

    There is a rough rule of thumb that you should take your age and halve it and that is the percentage of your pay that you should contribute to a pension.

    However, it is a rough guide. It doesnt take into account retirement age as it assumes state retirement age and doesnt take into account your investment style or how much you may want in retirement.

    Someone self employed will get around £4k less from the state than an employed individual for example. So the half your age rule would give those two types totally different incomes. So, use it with care.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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