Salary is £35k

MrBroccoli

I'm closing in on 40 and don't have a pension at the moment

My company is starting a pension scheme with peoples pension and I'm trying to decide how much I should pay in. I generally have around £500-700 left over each month.

I was thinking I would put in around £150-200 a month - does that sound sensible? Are there any online calculators that will help me work out how much I should put in each month?

Thanks

dunstonh

I was thinking I would put in around £150-200 a month - does that sound sensible?

£150-£200pm total contribution is ideal if you are in your 20s. You are not though. You are way behind on your retirement planning. So, you cant afford to treat it the same way someone in their 20s can.

How much do you want in retirement? (income and capital)
Have you done a state pension forecast?
How much is the employer paying in?

Justagardener

Iam dead against pensions. I know to many people who didn't end up with what they expected. After being widowed in my early 30's it made me think what If I get Ill and need to get to my money. Far better to be in charge of your own money

gazapc

As above, what are your aspirations for retirement? Any other investments / savings? In any case, the value you propose doesn't sound enough on its own.

gazapc

Justagardener wrote: »

Iam dead against pensions. I know to many people who didn't end up with what they expected. After being widowed in my early 30's it made me think what If I get Ill and need to get to my money. Far better to be in charge of your own money

There is one guaranteed way of not ending up with a pension, not starting one in the first place.

In any case, a pension is just a wrapper. All sorts of investments can be held instead (or alongside to ddiversify) to secure retirement income.

dunstonh

Iam dead against pensions. I know to many people who didn't end up with what they expected.

Yes. Lots of people dont end up with what they expect because their expectations are unrealistic. Too many people think that paying £150pm into pension is going to magic into £1500pm income in retirement. The problem isnt the pension. It is the expectation.

After being widowed in my early 30's it made me think what If I get Ill and need to get to my money.

You either have income protection or savings for that.

Far better to be in charge of your own money

Which a pension allows you to do. Except without a pension, you do it far less tax efficiently and have to pay in more to make up for that.

xj650t

Try the Hargreaves Lansdown website under Pension & Retirement tab you'll find a Pension Calculator.
Assuming DOB is 1977, you save ~£200 and Company contributes 1%, this pension pot may not be that large by 67. You may have other pensions or savings to keep you going in old age.

MrBroccoli

Thanks for your answers

dunstonh wrote:

How much do you want in retirement? (income and capital)
Have you done a state pension forecast?
How much is the employer paying in?

I think I could manage off an income of £15k per year
No
1%

xj650t wrote: »

Try the Hargreaves Lansdown website under Pension & Retirement tab you'll find a Pension Calculator.

Thanks - that's useful https://www.hl.co.uk/pensions/interactive-calculators/pension-calculator

dunstonh

You can get a state pension forecast online. So, do it. It will take you little time and it will tell you what you are currently forcast to get. You can then deduct that from your £15k target and that is what your shortfall is.

You are going to need to pay more than you plan though as you are behind. 1% from the employer will get better in future but its the bare minimum they have to do which means any more has to come from you.

maximumgardener

to OP
you should try to put in about 20% of your salary or a little more into Pension if you can squeeze that?

ie £7000 per year for now ( 20 % of 35 = 7)

its a long game (with ups and downs) ......your funds should be invested for decades all going well

Triumph13

A quick back-of-a-fag-packet for you. £200 a month for 28 years, rising with inflation, plus 1% from the employer. 4% pa real investment growth, 4% drawdown rate in retirement and £8k of state pension gets you to about £13.5k pa retirement income at 68 so unlikely to be enough.
Same calc's at £300 per month (which would cost you £240 after tax relief) gets to £16k.
If you don't want to keep working until you are 68, then the contributions needed go up by a lot. To have 15k gross from age 60 you'd need to contribute well over £600 a month for the next 20 years (allowing for the amount needed to bridge through to your state pension).