How much annual income in retirement?

Not_Me_Officer

Just very quickly so it doesn't get missed amongst when I reply later when I've more time:

Is the % generally of gross or of pensionable earnings such as with the workplace pension.

So 14% of £21k (my gross pay) being £2,940.
However when I calculated the contributions for my workplace pension, 14% was less than £2,940. I found it was of pensionable earnings or whatever phrase.

So when the advice is loosely to be what in my case would be 14% (as I started at 28) is it of total gross or of pensionable earnings like in the workplace pension?

Linton

In discussion %'s of pensions are normally calculated against gross earnings. Its gross earnings in retirement vs gross earnings whilst working that is of interest. Anything else gets unnecessarily complicated and dependent on detailed personal circumstances. However dont take half your age or whatever as an accurate rule. It's purpose is to solely to indicate an order of magnitude so that people dont think that putting 5% into a pension is going to guarantee them a comfortable retirement.

Marine_life

Interestingly the austrlian government provides a guide (the only country I think that does) on retirement living costs:

https://www.superannuation.asn.au/resources/retirement-standard

You could use this as a start point

atush

REad this (from the beginning- this is the last page)

https://forums.moneysavingexpert.com/discussion/2146737

Not_Me_Officer

Well it's good to know that it's a % of the total gross earnings rather than any of this complicated 'pensionable' earnings thing. I used https://www.moneyadviceservice.org.uk/en/tools/workplace-pension-contribution-calculator which does calculate the workplace contributions fairly accurately but based on that my 14% figure does not = £2,940 but instead converts as £141.16 per month * 12 = £1,693.92, a difference of £1,246.08. Quite an amount especially when stacked up over time.

My pay varies from month to month so i had been contributing around £150 to my workplace pension which had been set up as 10% through the online portal [plus] employer contribution of approx £14pm [plus] £100 per month to a S&S ISA.

Thank you for the links.

I also didn't realise i wouldn't be paying NI in retirement.

While i started at 28 i didn't save enough. We were saving hard for a house so i was only putting away £100pm. Then we got the house & work needed doing so i had to delay increasing even further.
The only time i did increase was late 2015 when we started the workplace pension by which time i was 32. So while i 'started' at 28 i guess i only started at 32 & even then the amount would be questionable i suppose.

At any rate i have just turned 34 and i have between £7,500-£8,000 set aside to begin this retirement journey with, that's the top & bottom of it. I just wish i had the confidence at 28 to go it alone rather than paying an IFA to do it for me (& take percentages).

But like with anything, there's always someone worse off. I just need to do what i can now.

atush

your employer only pay in 14 if you pay 150?

Not_Me_Officer

atush wrote: »

your employer only pay in 14 if you pay 150?

That was very rough so as to save me going finding a payslip. I'll give you 2 though...

One month i received £2,189.45 gross
I paid £17.03 as part of my minimum contribution (1%). I actually probably paid less as this will be with tax relief included i guess.
I also paid £153.31 as part of my AVCs (9% to make a combined 10%).
My employer paid £17.03 as part of their contribution.
Then took home £1,638.06 in my back pocket after the pension, national insurance & tax deductions.

That will have been a 5 week month so one of the higher ones.

The following month it appears i took some time off for whatever reason but the month after that read:

£1,873.38 gross
£13.87 as part of minimum contribs
£124.86 as part of 9% AVCs
Employer paid in £13.87
I took home £1,444.73 after the same deductions.

Just to show a little how my pay (& contributions) fluctuate

atush

the 1% employer contrib will go up over the next few years

My pay varies from month to month

In the months that you get a much higher pay, you can pay in extra lump sums.

westv

1% seems quite miserly.

somethingcorporate

westv wrote: »

1% seems quite miserly.

Nest......?