Pension opt in - what % to contribute?

Scarlet12

Hi all,

I am in the annoying position of having multiple employers. Put together my total wage and I'd have enough to be automatically enrolled to the new pensions, however individually none of them will need to contribute which has left me in the position of having to opt in to the scheme. I have contacted the first of my employers offering this to ask to opt in but they want to know what percentage I would like to put aside.

Should I pay in 4% each month which is what I would be paying in each month from Oct 18 in the auto scheme, should I be putting in 8% which is what I would receive if both I and my employer were paying in or should it be some other amount for reasons that I have not considered yet? The scheme is NEST if that has any baring on things.

I am finding advice for those opting in seems to be quite sparse so I would really appreciate some other opinions to think through before I make the decision.

Many thanks

princeofpounds

Hi there.


The ultimate goal is to put in enough money to meet your retirement objectives.


There are lots of pension calculators around the web that can do this for you. Normally people specify a certain % of their current income they want to be able to achieve.


There is an old rule of thumb that you need to contribute half your age into pensions. Whilst I am no fan of rules of thumb, because it misses out so much that is important in individual circumstances, it does give you an idea of the ballpark size of contributions.


4% won't give you much of a retirement income, and even 8% is likely to be somewhat low (and yes, we are all fully aware that almost no-one saves enough)


The other thing to take into account is that this is a moving target. Some of your assumptions (your investment returns, the size of the state pension, your retirement age etc.) will vary over time compared to reality. So every few years it's important to re-do the process to ensure you are on track.


Lots more advice will follow, but thought I'd start there.