planning for my retirement, pension questions

stolt

thankyou all so much for taking the time to reply to me. I'm afraid to say that i havent really paid much interest in this kind of thing since i was in my twenties, quite embarrassing really but i'm trying to read up as much but its very hard to understand. the reason behind the mortgage payments was that we we getting it down so we could have a better standard of life and also i was thne planning of adding some additional monthly money into my pension pot , again i need to look at a calculator to see how much that really adds over the long term if i put £100 in it extra per month.

beaker141

Stolt - I am similar in many ways to your scenario, 43 and starting to focus on pension planning now.

I think the reason for my lethargy in past years was the thought of having to buy an annuity with rates so low, now the pension freedoms are there its enthused me looking at how to build up "the pot" and scenarios of how to manage the drawdown to achieve "the number".

I've really focused now on increasing pension contributions to minimise higher rate tax - with 4 kids and child benefit there are some really crazy scenarios !

MallyGirl

I did the same as you and focussed on overpaying the mortgage until I was around 48. It was a security thing and I still remember when mortgage rate was 14%!
I now pay enough into my company pension to get the max contribution from my employer - in my case if I put 5% of salary they add another 10%. Plus it is salary sacrifice so I save the NI too. I then choose to add a further 20% of salary as AVCs again by sal sac. This is because I could see that the projected value of the pot wasn't going to be big enough to retire in the way that I want.
I also make max use of the ISA allowance with S&S ISA as I want to retire early and so need income between then and the time I can access pensions.
There is a lot of 'free money' to be had - a little bit of research can ensure that you take full advantage.

Triumph13

I'd second the points on not overpaying the mortgage at the expense of missing out on 40% tax relief on the pension.
I had a quick play with your numbers and they look a bit tight if you want to have the top end of your 25-30k post tax income at the bottom end of your 60-65 retirement age range, but fine otherwise.
£149k at 43 plus gross contributions of £813 per month (increasing with inflation) compounded at an average of 4% real return would give a predicted £526k at age 60 (in today's money). Assume you take that as £131k tax free cash and £395k left in drawdown and that you take 4% income from that each year, increasing with inflation. Added to 2 full state pensions of £8,300 each would give a post tax income of £29.9k with current tax rates / allowances from an assumed SPA of 69. To replace those state pensions between 60 and 69 would take £135k vs your predicted £131k lump sum so pretty damn close.