pension contribution or over payment on mortgage

jamesd

Assuming it's 40 years until you reach age 68 that'd make you 28 now so I'll use 1 Jan 1986 as the birth date and 27 July as the joining date in their calculator, along with picking the SHPS - CARE 1/80 scheme option and 145 total contribution. The calculator tells me that your pension would be £12,621 in real terms, which means today's money, at age 65, the normal retirement age for the scheme. It would be lower for earlier retirement.

Here's the detail of what it says:

Pension Details Normal Retirement Date 	01/01/2051
Pensionable Service (complete years and months) 	36 years and 5 months
Projected Final Salary 					£107,302
Projected Pension 					£37,032
Pension as % of Final Salary 				34.51%
Projected Pension in Real Terms 			£12,621
Death in Service Details Lump Sum 			£66,000
Dependant's Pension 					£5,007
Children's Pension 					£1,252
Tax Free Cash Sum Details Maximum Cash Sum 		£156,439
Maximum Cash Sum in Real Terms 				£53,316
Pension Reduction 					£13,566
Pension Reduction in Real Terms 			£4,623
Death After Retirement Details Dependant's Pension 	£18,516
Children's Pension 					£4,629
Dependant's Pension in Real Terms 			£6,310
Children's Pension in Real Terms 			£1,578
Contribution Details Gross Annual Contributions 	£3,080
Tax Relief 						£616
Ni Rebate 						£271
Net Annual Contributions 				£2,193
Net Monthly Contributions 				£183

TCPPC

Jamesd
Thanks for the illustration im sure other people will benefit from that example you provide. My current LTV is 83% so still high hopefully can get to 70% in the next 5 yr but as you mention most of the gain is when you are on 90%+.

i never thought about getting a personal one as well before i actually look into the shortfall using the aviva calculator. TBH once i get to retirement age hopefully mortgage free with some savings. I can live off with 15k if with no debt.

my thinking is you lose a lot of normal expense i.e car, insurance, petrol, night outs.

OldBeanz

Or you buy a flashy sports car so although you are doing fewer miles the expense is the same and your insurance goes up because you are partying abroad.
You will still have the ability to enjoy yourself at 70 and it is easier if you are not worrying about money by putting a little aside now .

ViolaLass

TCPPC wrote: »

my thinking is you lose a lot of normal expense i.e car, insurance, petrol, night outs.

Why? Don't retired people still get to drive and go out?

kidmugsy

The disadvantage of pensions is the inflexibility - the money is tied up for ages, exposed to political risk. You'd need an unusually good incentive to persuade you to contribute. The employer's 6% is that incentive.

dunstonh

my thinking is you lose a lot of normal expense i.e car, insurance, petrol, night outs.

You gain expense in its place. Currently you spend you money in your social time and spend little or nothing in your working time. In retirement, you have no working time. just 7 hours more a day to spend money.