Pension - where to start please

flashsnaps

Wow, thank you so much! A lot to take in there. Your assumption was correct, I haven't a clue.

One question for pensions, I am using a calculator I found online. Say I pay in £80 (assuming the calculations below added the governments contribution)

Sorry if some of these questions are !!!!!!.

(1) The government adds 25% taking this up to £100?
(2) Based on this, I am 28 now and retire at 65. Estimate value of my pension according to an online calculator will be £41,000. With an income of £1480 pa - can I take out more than £1480 pa? e.g. might only live until I am 70
(3) Will I get this £1480pa until I die or until the £41,000 runs out?
(4) State pension, do I get this additionally to my £1480 pa?

xylophone

I'd rule it out for a 28 year old

A 28 year old of my acquaintance runs a SIPP alongside his occupational pension and ISA.

OP, your employer will soon have to provide a pension scheme- have you checked the staging date?

If you wish to start a pension of your own, you will find some useful information here about pension tax relief.

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

You would expect to increase your pension contributions in line with growth in your earnings.

Here is some information on accessing a pension if you were retiring today.

https://www.pensionwise.gov.uk/ See the guides available. For example https://www.pensionwise.gov.uk/pension-pot-options

The state pension is paid in addition to your personal pension.

See https://www.gov.uk/new-state-pension/overview

http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/ might be worth a look.

atush

flashsnaps wrote: »

Wow, thank you so much! A lot to take in there. Your assumption was correct, I haven't a clue.

One question for pensions, I am using a calculator I found online. Say I pay in £80 (assuming the calculations below added the governments contribution)

Sorry if some of these questions are !!!!!!.

(1) The government adds 25% taking this up to £100?
(2) Based on this, I am 28 now and retire at 65. Estimate value of my pension according to an online calculator will be £41,000. With an income of £1480 pa - can I take out more than £1480 pa? e.g. might only live until I am 70
(3) Will I get this £1480pa until I die or until the £41,000 runs out?
(4) State pension, do I get this additionally to my £1480 pa?

1, yes
2, depends on what you do with your pot? Buy an annuity or use DD. 25% of the 41K could be taken tax free, and the rest as income, taxed.
3, yes if you buy an annuity, the second option if you use DD (drawdown)
4, yes

41K does not a good retirement make (but is much better than nothing) so do look to put in more than 80. how much as a % is 100 to your salary? AS said above, you should look to put in (incl the tax rel ) about 14%.

flashsnaps

@Atush
Thanks for helping me.

(1) great
(2)
(3) Do you have to decide on Anunity or DD when you take it out? or can you change it?
(4) great.

£80 is just an example, I earn 30k currently, so £350 would be 14%. Probably look at doing £250 until my student loan is paid off (10months ish)

(5) But if I earn 42k pa I get a high tax relief? e.g. I put in £60 pcm and I get £100 ? That right?
(6) The value of the pension should go up, is this based on the provider paying me interest? (apart from me paying in of course)
(7) If i start paying into a pension tomorrow, I take it, I cannot back date the tax?




Any suggestions on providers or am I better speaking to an IFA?

atush

3, decide later

4, 250 in your pension gets grossed up to 312 so most of the way there?

5, any pay over the HRT threshold gets 40% relief, but only half in the pension, you reclaim the extra off HMRC who will change your tax code to take less.

6, no interest from the provider, your money is invested in funds just like with a S&S isa. So it goes up by the performance of the funds you use. But some of these can be bond funds, property funds etc- doesn't just have to be equities.

7, not sure what you mean but pensions paid into today and going forwards are for this tax year. Once the tax year is over on Apr5th, the books close and you move onto the next tax year.