Not sure if your pension will be enough?

bigfreddiel

You're worried that your pension won't be enough to maintain the lifestyle you're accustomed to?

This is how I convinced myself that I would be okay.

First open an account that earns a little bit of interest, you may need more than one if you're committed to this project. Tesc accounts are good for this exercise.

Next work out what your income in retirement will be, include things like SP, WFA and so on.

Then either deduct from your income the excess income you are receiving over and above your expected pension and save it in the account you just opened.

Or at the end of each month, just before payday, put what ever is left over into the account you just opened.

Do this for a year, do not dip in to the account(s).

I've done this for a year, and saved £26,000 so I'm happy I can retire and not change my lifestyle, except for the saving bit!

Now what to do with that £26k I've saved?

Hope that helps, fj

saver861

bigfreddiel wrote: »

You're worried that your pension won't be enough to maintain the lifestyle you're accustomed to?

This is how I convinced myself that I would be okay.

First open an account that earns a little bit of interest, you may need more than one if you're committed to this project. Tesc accounts are good for this exercise.

Next work out what your income in retirement will be, include things like SP, WFA and so on.

Then either deduct from your income the excess income you are receiving over and above your expected pension and save it in the account you just opened.

Or at the end of each month, just before payday, put what ever is left over into the account you just opened.

Do this for a year, do not dip in to the account(s).

I've done this for a year, and saved £26,000 so I'm happy I can retire and not change my lifestyle, except for the saving bit!

Now what to do with that £26k I've saved?

Hope that helps, fj

I'm not sure what WFA is.

In any event, I don't suspect there are many who will be in a position to save £26,000 in a year over and above their normal outgoings.

Those in that position probably don't need to do the exercise in the first place! I guess though the concept will work regardless.

RickyB2000

I think this also only really works if your current out goings are in line (or can be in line) with your expected out goings in retirement. If you still have large morgatage repayments that you won't have when you retire, it may appear you do not have enough pension when in fact you do.

atush

bigfreddiel wrote: »

You're worried that your pension won't be enough to maintain the lifestyle you're accustomed to?

This is how I convinced myself that I would be okay.

First open an account that earns a little bit of interest, you may need more than one if you're committed to this project. Tesc accounts are good for this exercise.

Next work out what your income in retirement will be, include things like SP, WFA and so on.

Then either deduct from your income the excess income you are receiving over and above your expected pension and save it in the account you just opened.

Or at the end of each month, just before payday, put what ever is left over into the account you just opened.

Do this for a year, do not dip in to the account(s).

I've done this for a year, and saved £26,000 so I'm happy I can retire and not change my lifestyle, except for the saving bit!

Now what to do with that £26k I've saved?

Hope that helps, fj

Put most of it into a pension?

p00hsticks

saver861 wrote: »

I'm not sure what WFA is.

Winter Fuel Allowance
Personally, I'd not be relying on this, as means testing it must be on the cards when the current government finally realise that they can't squeeze anymore of the £12 billion welfare savings they want from the Working Age benefits and have to start looking at Pension Age ones...

MoneyWorry

I am always afraid I will not have enough, but the post is unfortunately not relevant to me as my gross salary is nowhere near £26000. People in my position have a lot more financial planning to do as their pension amount will have to equal or come just below their actual salary.

[Deleted User]

Many moons ago, late nineties... When RBS sold our department off and as part of the transition we had pension meetings with advisors of some sort.


Anyway the one piece of advice that has always stuck in my head is to chuck as much money as you can afford into a DC scheme now that we were no longer in a DB [pays out from 60 if I remember but only about ~£3k PA] scheme.


Even though I no longer work in the private sector, public sector with 67 NRA, I have a pot I still add to which is likely to be used as a funding gap if I go early Who the heck wants to work till 67, unless part time etc...


So I'm thanking my younger self now


Cheers

[Deleted User]

MoneyWorry wrote: »

I am always afraid I will not have enough, but the post is unfortunately not relevant to me as my gross salary is nowhere near £26000. People in my position have a lot more financial planning to do as their pension amount will have to equal or come just below their actual salary.

But pension contributions don't have to come just from your salary. The Wife's HL SIPP is mainly funded from Solar FITs, RHI, Quidco, Bank account bonuses, interest from stoozing etc That alone with a few salary contributions is about £2000 a quarter + tax relief

PasturesNew

State pension plus minimum income guarantee is £650/month.

I could easily live on that! That's more than many jobs pay after single people've paid rent/mortgage.

Where I live, the rent on the house I am sitting in +£650/month would mean I'd have to earn £20k to break even .... if I could find a job that paid £20k I'd think I'd won the lottery.

HappyMJ

bigfreddiel wrote: »

You're worried that your pension won't be enough to maintain the lifestyle you're accustomed to?

This is how I convinced myself that I would be okay.

First open an account that earns a little bit of interest, you may need more than one if you're committed to this project. Tesc accounts are good for this exercise.

Next work out what your income in retirement will be, include things like SP, WFA and so on.

Then either deduct from your income the excess income you are receiving over and above your expected pension and save it in the account you just opened.

Or at the end of each month, just before payday, put what ever is left over into the account you just opened.

Do this for a year, do not dip in to the account(s).

I've done this for a year, and saved £26,000 so I'm happy I can retire and not change my lifestyle, except for the saving bit!

Now what to do with that £26k I've saved?

Hope that helps, fj

I don't think that really works like that. Before my mortgage was paid off I needed to earn £18,000 a year to meet my daily living expenses. £6,000 of that went to the mortgage. I now only need to earn £12,000 a year to meet all of my daily living expenses. I will get £12,000 in retirement and I currently live off £12,000 which to me is enough so you are saying I don't need to save any more into my savings account.

As the last post states I also supplement my income with Quidco, Topcashback, vouchers and discounts. I don't include any of that money as income. I use that money to enjoy myself. I also get bank account switching bonuses and undertake mystery shopping for fun which pays for some days out. I don't expect to ever stop doing that.

bigfreddiel

saver861 wrote: »

I'm not sure what WFA is.

In any event, I don't suspect there are many who will be in a position to save £26,000 in a year over and above their normal outgoings.

Those in that position probably don't need to do the exercise in the first place! I guess though the concept will work regardless.

WFA = Winter Fuel Allowance = £200 per household, not much but it all counts.

Also where you put your excess salary is of course up to you, I just used a Tesco account as an example, you could whack it into your pension or ISA, or over pay your mortgage, it's up to you.

Cheers fj