How Does My Pension Pot Compare?

Mr.Anderson

I have a private pension which I thought was doing ok, but the breakdown of what I might get when I retire compared to that of my partner (who is on a teachers pension scheme) pretty much sucks (and makes me want to switch careers).

The projected amount I will get varies a lot with my statements every year, so was trying to work out how my pension pot compares to what others have saved.

I'm supposed to be able to do this on financearoo.com but whilst I can see how my income, savings, debt and mortgage compare against others, I can't see how my pension pot compares as it says it's "Still processing pension pot data".

Has anyone else using the site managed to compare their pension pot? Or can anyone recommend any other sites which allow you to compare the same data?

bolwin1

Why does it matter how your pension savings compare to someone else's, other than idle curiosity ? if 80% of people are in a parlous state re pension provision (made up on the spot statistic), would you being slightly better off than them be any good ?
Surely it's more important that you know what you your targets are in terms of retirement age & income & you have a plan to get there.
Given you have mentioned the same comparison site in 2 posts today, I can't help thinking this is a subtle attempt to get people to check it out.

Number75

You are wrong Bolwin.
It’s not subtle

Mr.Anderson

bolwin1 wrote: »

Why does it matter how your pension savings compare to someone else's, other than idle curiosity ? if 80% of people are in a parlous state re pension provision (made up on the spot statistic), would you being slightly better off than them be any good ?
Surely it's more important that you know what you your targets are in terms of retirement age & income & you have a plan to get there.
Given you have mentioned the same comparison site in 2 posts today, I can't help thinking this is a subtle attempt to get people to check it out.

Honestly? I don't know. I feel like my pension statement has gone from what I thought was adequate to now being scarily bad. My pot has gone up a lot I feel, so don't really know why my outlook has changed so much. Knowing what my partner is due to get has made me think what I have is bad, but maybe it's average for private pensions?

I guess like you say, knowing what my targets are is the important bit, but knowing what my target should be is difficult. All I really have to go on at the moment is how much my parents pension is, and I know they live comfortably on that, but they invested in pensions in very different times.

And for the reason I've mentioned it twice, my first posting had 3 questions, 2 of which have been answered, so I've re-posted the last question in this area instead as it seems more appropriate to where my biggest concern is at the moment which is my pension, as it seems like the biggest unknown in my financial plans.

Kit_Katt

Best thing to do is take a view on what you need to cover retirement costs as a minimum and what you want and add contingency to both.

See what your pot will deliver v what age you wanr to rerire and what would your plan look like to deliver success .

Average pot in Blighty is very poor anything from £50k to £150K ... do the maths on a 4% draw down rate and retirement is going to look pretty bleak if you are in that bracket.

Mr.Anderson

Kit_Katt wrote: »

Best thing to do is take a view on what you need to cover retirement costs as a minimum and what you want and add contingency to both.

See what your pot will deliver v what age you wanr to rerire and what would your plan look like to deliver success .

Average pot in Blighty is very poor anything from £50k to £150K ... do the maths on a 4% draw down rate and retirement is going to look pretty bleak if you are in that bracket.

Don't suppose there's a retirement costs calculator anywhere? I am good at short term budgeting but have no idea what I'll need when I retire. I assume I would need a lot less that I need now as I won't have the house or the kids to pay for. But I think I read something recently about people needing more than they think due to health issues and the like.

We use a financial advice company at work, but they couldn't really recommend anything to me other than it's up to me to know what I think I will need when I retire. Which I guess is completely fair, I just feel it would be good to have a starting point.

I'd read about the 4% draw down rate. I'll be out of that bracket when I retire, but still looking bleak. Maybe I should just invest it all in bitcoin :rotfl:

Joey_Soap

As a very rough guide I'd say, try to calculate approximately how much money you need to spend each year to live in retirement. Get a state pension forecast and subtract that from the total you need annually. What you have left is then the gap you are needing to fill with your pension pot. Multiply that number by 25 and that is the lump sum approximately that you're going to need to save between now and retirement. This is very rough and ready but better than nothing and simple to work out. Note that there is no contingency in this number and no allowance for income tax at 20% either. So, you should plan to exceed this number by some margin, if you can. Only you can decide what to do once you have these numbers, but people here will try to help.

bostonerimus

The only comparison you need to do is whether or not your pension pot is/will be sufficient to cover your retirement income needs. Comparisons with other peoples' pots either leads to envy or smugness and you are better off without those.

So find out how your pension provider is calculating your retirement income. If it assumes you buy an annuity the number will be small given today's rates. Once you understand their methodology research how to project the size of your pension pot given your contributions and conservative assumptions for inflation and investment return. The take 4% of the number and that will give you an inflation linked income that you can probably sustain for 30 years.

OldMusicGuy

Three things. First, take a skim through this long thread: https://forums.moneysavingexpert.com/discussion/2146737/pensions-planning-the-number#topofpage
I suggest starting at the last page and working backwards. Lots of people post their views on how much they will need in retirement and it should give you some ideas.

Second, get your state pension forecasts (you and your partner) and work out what the shortfall might be between your combined SPs plus her pension and how much you will need to live comfortably in retirement. That's what your pension will need to make up. As a rough rule of thumb, you could use a 3% withdrawal rate (which is increasingly what's recommended for the UK rather than the 4% you hear about). So if you need to provide 5K per annum from your pension, a pot of around 167K would be a reasonable estimate.

Third, don't split from your partner. It will play havoc with your pension planning.... ;-)

Muscle750

Simple get a job in the public sector as ive been told numerous times and then your pension will be 5 times better than us low lifes in the private sector who are paying for the gold plate public sector pensions in taxes.As their is no such thing as a public sector pension pot its all what your promised to get when many walk out the door at 55 or 60 and dont take a hit on their public sector pensions and many having more income from their pensions than if they carried on working. Meanwhile ill carry on regardless till im 67 after the enjoyment of having our final salary scheme ripped from under our feet many years ago and a miserly 5% paid into ours by our employers. unlike the massive percentages paid in by the employers sorry tax payers in the public sector

AnotherJoe

Mr.Anderson wrote: »

I have a private pension which I thought was doing ok, but the breakdown of what I might get when I retire compared to that of my partner (who is on a teachers pension scheme) pretty much sucks (and makes me want to switch careers

The first thing you need to understand is that those projections are highly misleading because they are based on extremely conservative assumptions, so conservative as to be close to lies. They are also not based on your personal circumstances but are generic. Probabiy little harm in that if they encourage most people to save more since that's what most need to do, but very bad if they get you to change career when you don't need to !

The second thing is to start educating yourself about investments and strategies for providing a pension from your investments which most likely, especially in early retirement will not be annuities (which is what these misleading projections are based on. ).