Am I saving Enough?

Sibbers123

Hi!

As a 25 year old I thought it was about time I started to think about pensions. So the master plan is;

My auto-enrolment pension which is about £170 per month which will rise to £260 per month from next April when the contribution rates increase and a pay rise - this is with NEST (this is employee and employer contributions)

Also, I am putting away £160 net (£200 gross) in to a private Aviva pension (Medium risk).

So in total, it will be around £5,500 per annum I am contributing with a plan to retire around 65-70.

On top of the above, I should qualify for a full state pension but who knows at what age the government will make the retirement age!

With my salary gradually increasing year after year and NEST being almost a 'deafult' auto-enrolment pension I suspect that the returns on my NEST pension pot are lower than they could be compared to other providers - would it be worth transferring my NEST pension to my Aviva pension every few years? I do like the idea of not having all my eggs in one basket though.

I could probably afford to put a little more away but would like some liquidity (just in case) so I was looking at the Aviva Stocks & Shares ISA.... would this be a good idea?

Thanks
Adam

Bimbly

Will you be buying your first home in the future? Think about a LISA.

kidmugsy

Bimbly wrote: »

Will you be buying your first home in the future? Think about a LISA.

If I were a youngster considering buying a house I'd put a LISA ahead of the private pension contributions. I'd hope to make more pension contributions in future when the tax rebate might be higher.

Sibbers123

I presume you get a stocks and shares LISA?

I could possibly contribute £333 per month to get the maximum 25% bonus (could do a catch-up for 2018/19 tax year).

With regards to buying my first home, I have a deposit in place already I am just waiting for Brexit to 'blow over' - I would hate to purchase a property now and come March prices dip by 10-15%.

bostonerimus

It's impossible to answer your question without knowing your salary or your budget......or inflation and market returns for the next 40 years. We can guess at the last two numbers, but you need to tell us the first two.

As a very rough rule of thumb you should be saving between 15% and 20% of your gross salary....more would be better.

atush

Sibbers123 wrote: »

Hi!

As a 25 year old I thought it was about time I started to think about pensions. So the master plan is;

My auto-enrolment pension which is about £170 per month which will rise to £260 per month from next April when the contribution rates increase and a pay rise - this is with NEST (this is employee and employer contributions)

Also, I am putting away £160 net (£200 gross) in to a private Aviva pension (Medium risk).

So in total, it will be around £5,500 per annum I am contributing with a plan to retire around 65-70.

On top of the above, I should qualify for a full state pension but who knows at what age the government will make the retirement age!

With my salary gradually increasing year after year and NEST being almost a 'deafult' auto-enrolment pension I suspect that the returns on my NEST pension pot are lower than they could be compared to other providers - would it be worth transferring my NEST pension to my Aviva pension every few years? I do like the idea of not having all my eggs in one basket though.

I could probably afford to put a little more away but would like some liquidity (just in case) so I was looking at the Aviva Stocks & Shares ISA.... would this be a good idea?

Thanks
Adam

What % is this of your total salary?


Do you have a cash emergency pot?

Do you own your own home (or do you plan to do so)?

Edit, I see you ahve a deposit. is it enough? Do you live in the SE (the area most likely to be affected by brexit)? Do you have enough for the costs on top of the property like stamp duty, insurance, moving costs?

FatherAbraham

atush wrote: »

What % is this of your total salary?


Do you have a cash emergency pot?

Do you own your own home (or do you plan to do so)?

Edit, I see you ahve a deposit. is it enough? Do you live in the SE (the area most likely to be affected by brexit)? Do you have enough for the costs on top of the property like stamp duty, insurance, moving costs?

Why is the South-East most likely to be affected by Brexit?

One might just as well argue that deprived areas remote from European trading partners, such as Cornwall, Central Wales, and North-West England will become even further isolated if border friction increases. In those circumstances, industries which were marginally viable could be pushed over the edge.

There are many other plausible stories. Noöne really knows with confidence.

Triumph13

+1 on the LISA. As you are planning on buying soon anyway it's a no-brainer to collect your £1k a year of top up from the government.
I would also question the wisdom of choosing 'medium risk' assets for your pension fund. As you are expecting to leave these invested for another 40 years then you really want to be primarily in equities as you aren't really worried about short term volatility.

Bimbly

Sibbers123 wrote: »

I presume you get a stocks and shares LISA?

If you are buying a house soon, then probably not. Go for a cash LISA and get the bonus. S&S would be for the long term where you have time for your investments to recover from any downturn.

kidmugsy

FatherAbraham wrote: »

Noöne really knows with confidence.

I love the "Noöne", Pops. I hope you don't find this remark uncoöperative. I don't think I've seen diaeresis much since early secondary school. Except in German.