Pension Provision - Is £220 a month enough?

jem16

Brightspark87 wrote: »

Hi Just to say with the changes in pensions legislation there is no 'amount you can have a year', rather you have a pot from which to draw money from.

I would be very surprised if annuities will disappear completely. For a lot of people they will still be the way to fund retirement with a set amount each year for life.

Brightspark87

jem16 wrote: »

I would be very surprised if annuities will disappear completely. For a lot of people they will still be the way to fund retirement with a set amount each year for life.

maybe but only if you have a health or lifestyle problem you are often far better off not taking an annuity. ESP with the flexibility of increasing and reducing income.

dunstonh

Whilst the media has focused on unsecured pension options that have changed, they have largely if not totally ignored the changes that secured options are going to have. For example, death benefits on annuities will no longer be capped by legislation to 10 years. Return of unused fund will be possible. Annuity providers are already working revised annuities with better death benefits.

The regulator is still going by "capacity for loss" as well "knowledge and understanding" with retirement income options. So, on that basis, if you strip out small funds (which are almost certainly going to be drawn as lump), you would expect annuity to still be the majority option. Albeit one with likely improved death benefits. Although the greater the death benefit, the lower the annuity rate. Annuities will still be the main, if only, option that will provide a guaranteed income for life.

Annuity has been made a dirty word in some places. However, it will still be a popular and viable option.

bmm78

Brightspark87 wrote: »

maybe but only if you have a health or lifestyle problem you are often far better off not taking an annuity. ESP with the flexibility of increasing and reducing income.

People are still buying annuities in significant numbers. Obviously far less than when they were (incorrectly) considered by most to be the only option, but it is still a huge market.

Assuming they are looking at drawdown objectively (eg proper assessment of Attitude to Risk and Capacity for Loss), a lot of people come back to annuities as the lesser of the available evils.

As much as certain people want drawdown to be the default option, the mass market is neither psychologically or financially able to deal with investment risk.

atush

Towser wrote: »

oh dear well I am stuffed then, it looks like I will be a pauper in later life. I will have no choice the figures seem impossible to achieve. My number will have to be whatever I can afford. I will have to try and put as much away as possible. Hopefully by then no mortgage to pay.

I too am a carer for my disabled son. I was under the impression you get your bit accrued by the government if you are a carer. I will probably always be a carer as my son is Autistic. Euthanasia is not even an option as he will always need caring for.

I have a resolve that I can live off anything by sheer budgeting. Looks like I will be below the poverty line then but then won't benefits kick in?

TBH, you wont be 'stuffed per say. You will still have more than if you hadn't saved at all (as pension credit will be no more?)

If you have been putting away 25 per month into a pension for 25years, what has that pot grown to? How many years have you to go? have you had a benefits check, and are you getting all you should in respect of your disabled son such as carer's allowance etc?

Have you done an MSE check to save on all outgoings? Done a spending diary? You might be able to save more?

MoneyWorry

Bootsox wrote: »

To OP, just to help you on your way with the calcs, unless you have a drugs/drink/gambling habit suggest the following:

£10/12k (net*, per annum, per person) in a mortgage free property, with no dependents, would provide a basic standard of living with occasional holiday treat.

Circa £24k (net*, per annum, per person) would provide a comfortable living, e.g. run a small car plus a 2/3 foreign holidays plus occasional weekend treats.

add 50% to above for a couple in same circumstances.

....and all shades of grey in between.

*means free from deductions, i.e. after tax

£24000 net!!! What planet are you on? I have a gross salary of £16500pa. I have a mortgage, pay more into my pension than the OP has been doing, run a car, have an annual holiday and save a tiny bit,


OP - Why don't you let us know what your current pension fund is worth and complete an SOA. That way, you'll see what your current lifestyle is like and what your current pension savings will give you?

somethingcorporate

MoneyWorry wrote: »

£24000 net!!! What planet are you on? I have a gross salary of £16500pa. I have a mortgage, pay more into my pension than the OP has been doing, run a car, have an annual holiday and save a tiny bit,


OP - Why don't you let us know what your current pension fund is worth and complete an SOA. That way, you'll see what your current lifestyle is like and what your current pension savings will give you?

I agree with this, those numbers are bonkers. £48k net is more than the average gross household income so not likely to be accurate for most!

Towser

benefits check none made and

are you getting all you should in respect of your disabled son such as carer's allowance etc?

yes I think so

Total fund 13500.00 so far

At age 65 born 1969 £215 per month with profits

Currently £220 per month is pension contributions not the target amount which is why I was wondering what should I pay.

I could easily pay more but was wondering how much?

atush

Basically, to know how much to save, you need to know The Number. Look up the thread and read it.

You need to work out how much you will need to live on (in today prices) and fool around with a pension calculator until you reach that point.

Only you can determine your number, although doing an SOA as suggested will help.

MoneyWorry

So very very roughly you'd have £795 a month coming in at retirement. Only you can know how much you need, but the way I did it was look at my expenses now and importantly have I got the life I want. I then took my pension projections in today's money and I know where I stand. I know there's lots more technical ways do doing it, but this works for me.

One thing to realise is that if you were born in 1969 and you want to retire at 65, you haven't got a massive amount of time for any extra contributions to grow.