How much should I have

puk999

Good_bad_and_ugly wrote: »

as long as you can put the kettle on and brush your teeth

I did this once, but don't recommend it. My gums were sore for days because of the boiling water

OP: £20k at age 25 sounds great to me. It's £20k more than I had at your age. Congratulations for pension planning early. You have the magic of compounding on your side.

If you up your contributions, can you get even more out of your employer?

Did you choose what funds you're money is invested in?

bmm78

puk999 wrote: »

OP: £20k at age 25 sounds great to me. It's £20k more than I had at your age

Seconded.

It's a good solid base to work on, but what is "enough" really depends on when you expect to retire and how much you need to live on. You may not have a clear idea of the answers to those yet, and there is no such thing as a universal figure that is appropriate for everyone.

Important to stress that pensions are just one piece of the overall picture. They should be balanced against the need for an emergency fund, saving up for a deposit on a property, NISAs and the like which are potentially accessible before your late 50s, and of course taking the time in your 20s to enjoy yourself and live a bit.

As very broad guidance (not advice taking account of any specifics), I'd make sure I was contributing enough to get the maximum employer contribution, and then with whatever is left look at other financial goals and objectives such as those above.

Loughton_Monkey

clear_as_mud wrote: »

.......Add them together and I have about £20k. I am 25 years old. Is this about right for my age? Am I on the right track or do I need to be adding more each month?......

Assuming you have another 40 years or so to work, then consider 2 scenarios:

1. You continue to work, at £25K-ish, with CPI rises and the odd little 'extra' rise every 5 years or so....

2. You continue to work, doing well, and by the age of 50, you are MD of the company on [today's values] around £750K plus bonus.....

Then if (1), your £20K is fine. If (2), your £20K might just pay for your Council Tax every year.....

It's more to do with spending. If you retire roughly around the 65 year old mark, then whatever spending [i.e. the cost of your lifestyle] you wish to maintain in retirement, should be multiplied by 20 (minimum) to get the total spendable retirement assets required. They do not need to be only in pensions. They can (should?) also be in ISA's and can include a proportion of your your house if you plan to downsize.

If you retire early (say at 55) then consider 30Xspending as a more realistic target. This requires that you spend only around 65%/70% of your gross income on average. But a lot depends on your earnings (and spending) profile over time.

So keep a solid account of your spending as you go through life in order to examine thoroughly what your lifestyle is costing [not necessarily including costs of rearing kids that will be self sufficient when you retire]. This is exactly what I did, and it turned out well. My own earnings did 'well' for 70% of my working life and then "very well" for the latter 30%. What I am saying is that if I had not had an intimate knowledge of my lifestyle, I might well have "spent up to" quite a high salary.

In turn, this would have given me a lifestyle that I would have found impossible to sustain with my (then) retirement assets. I would have needed to work for another 10 years and/or drastically reduced my lifestyle in retirement.

xylophone

http://www.nationwidepensionfund.co.uk/deferred-members/welcome

This seems to be a defined benefits scheme.