What size pot do I need?

TH1878

Thrugelmir wrote: »

Basing the future on past performance offers no guarantees. One suspects that there are going to be some very disappointed people. In the main there's a lack of pension saving at a high enough contribution level. .

Definitely agree with this. The figures I gave the OP rely on a linear growth rate and the only thing I can say with absolute certainty is that growth won't be linear.

Shoot for the stars and you might get the moon.

redux

Radiantsoul wrote: »

Do you think a lot of people are paying too much into their pension?

A few years ago I was told that about half of people didn't have a pension scheme.

I don't know if that was correct, but I just discovered that membership of occupational schemes in private sector companies has roughly halved in 15 years. The proportion of self-employed men currently contributing has declined from just over 60% to just over 20%.

I picked those from an Office of National Statistics pdf I just looked at for 2014, and here is a Telegraph article also pointing to dramatic declines in the proportion of people saving in pensions.

http://www.telegraph.co.uk/finance/personalfinance/pensions/10182664/Number-of-people-paying-into-a-pension-hits-60-year-low.html

hugheskevi

A few years ago I was told that about half of people didn't have a pension scheme.

In the private sector this has always been the case, even back in the 1960s and 1970s.

Although participation in private sector has declined over the last decades (roughly from half to one third), the other big change has been the shift from Defined Benefit to Defined Contribution - meaning fewer people building up lower value pensions.

The proportion of self-employed men currently contributing has declined from just over 60% to just over 20%.

Pension provision among the self-employed is very difficult to accurately interpret. The nature of self-employment has changed a lot in recent decades - once upon a time being self-employed often meant a good income or ownership of a lucrative business which may be sold in the future. Now the nature of self-employment is very diverse, with some having very high incomes but many having very low incomes.

Nonetheless, the low pension coverage in the group is, at the very least, concerning.

I picked those from an Office of National Statistics pdf I just looked at for 2014, and here is a Telegraph article also pointing to dramatic declines in the proportion of people saving in pensions.

The Occupational Pension Scheme Survey does not cover Group Personal Pensions, so significantly overstates the decline, as the DB-DC shift was generally an occupation DB pension shifting to a Group Personal Pension.

Looking at Annual Survey of Hours and Earnings gives a more comprehensive picture.