How much pension will you get? Build your own dashboard to keep track of your progress

kikkime

I am 29 and have just started my permanent job. I have read that I should have been paying at least 35 years of NI to get full pension when I retire. At this rate I can only achieve that when I am 64. But we can only claim pension at 66 am I right? Perhaps by the time I actually retire the government has raised the age again. Should I be worried about this?

barnstar2077

kikkime wrote: »

I am 29 and have just started my permanent job. I have read that I should have been paying at least 35 years of NI to get full pension when I retire. At this rate I can only achieve that when I am 64. But we can only claim pension at 66 am I right? Perhaps by the time I actually retire the government has raised the age again. Should I be worried about this?

I would say 68 plus. As you say the government keep putting it up. Don't be disheartened though, use that knowledge to strengthen your resolve to make your own preparations and retire earlier. Take advantage of your workplace pension for a start. Put in at the very least the percentage that the company will match. Do it now so you don't miss the money. Then start reading up on here and around the net and come up with a plan!

ermine

kikkime wrote: »

Perhaps by the time I actually retire the government has raised the age again. Should I be worried about this?

No, because you presumably are currently saving towards a pension independently of the SP. I have retired though it is still a fair way to go to my government SP age. You can make voluntary Class 2 NI contributions or Class 3 to make up for years you aren't working or are working at a low or part-time level. But don't even think about doing that until you are within 15 years of SP age. Just bear in mind you don't have to be working all the 35 years of NI requirement to get it.

There will be two primary reasons for the governments to raise the age, one is they ran out of money, the other is that advances in medical technology through the rest of your lifetime are raising life expectancies. The former you hedge against with your own provision, so that you can choose when to retire, if desired earlier than the government age.

The latter is entirely good news - you are likely to live several years longer than I, and I tip a hat to your good fortune and wish you a long and healthy life, make the best of it!

LHW99

And if you should become unemployed later in life, signing on gets you credits towards your pension.

[Deleted User]

dharm999 wrote: »

Monevator covered this very recently, two very detailed articles:

https://monevator.com/what-is-a-sustainable-withdrawal-rate-for-a-world-portfolio/

https://monevator.com/how-to-improve-your-sustainable-withdrawal-rate/

He ended up at, 4%, so maybe it's not such a crazy number.

Having said that, I'm using 3%, combined with a real low growth rate of 3%, in my spreadsheet

Pretty good articles but he recommends a system where you might be cutting expenditure dramatically if the trouble hits. That allows you to start with 4%. I really wouldn’t call his system SWR, as “safe” implies that you can carry on withdrawal at a 4% rate and live happily ever after. He is pushing for variable withdrawal rate.

dunstonh

jamesd wrote: »

Well, "safe withdrawal rate" is what the relevant research is called, so in the context of journalism - the author among other things having formerly been a personal finance writer for the UK's leading financial newspaper - it's not too bad. Particularly given the dashboard and pension tracking theme.

That may be so. However, look at how literally people rely on what is said in MSE articles.

The "safe withdrawal rate" is based on a range of assumptions. How does MSE know the people reading the article are running their portfolios to the same assumptions? The recent FCA thematic review found too many DIY investors are holding too much cash. Some are 100% in cash and not invested. The safe withdrawal rate is no good for them.

When MSE articles are taken as gospel, as in "I read it on MSE so it must be right", there has to be a duty of are. Otherwise it will come back and bite them.

You, me and many other regulars in the section can understand the things but remember who the articles are written for.

Thrugelmir

jamesd wrote: »

No real substantiaion seems needed. It's true that 4% is a widely used rule of thumb and it's no more a guarantee than any rule of thumb.

To base an entire 30 year personal financial plan on a rule of thumb exposes one to risk. However small the risk may be. Personally I'm unconcerned about being exposed to "risk". I'm more concerned for those that that have only been investors in the good times. Who assume that is the "norm". That making money requires nothing more than sitting back in an armchair watching their choosen investments effortlessly grow in value.

Thrugelmir

Deleted_User wrote: »

I really like this guy’s “cushioned withdrawals strategy”, which is a variation on variable withdrawal.

Article is 5 years old. Recommendation of holding short dated Government bonds may be a good suggestion. However the continuing low yields on offer arent very attractive.

hugheskevi

I am 29 and have just started my permanent job. I have read that I should have been paying at least 35 years of NI to get full pension when I retire. At this rate I can only achieve that when I am 64. But we can only claim pension at 66 am I right? Perhaps by the time I actually retire the government has raised the age again. Should I be worried about this?

Your State Pension age is already 68. It may change in the future, and any change is likely to be upwards. Until you are aged about 60 it may change multiple times - after age 60 there is no guarantee of no change, but it becomes less likely.

35 qualifying years is required to obtain a full State Pension. However, this may be different if you have been in contracted-out of the State Second Pension in the past. You may also have received credits in the past (eg due to benefit receipt) or qualified through casual employment. You should check your position using the "Check your State Pension" tool on gov.uk - this shows the status of all your past years.

As ermine says above, you can make voluntary payments to make some past years into qualifying years, but this is probably not a good idea unless the cost is extremely low (ie you almost qualified but not quite) given it is likely that you have time to qualify for a full pension.

[Deleted User]

Thrugelmir wrote: »

Article is 5 years old. Recommendation of holding short dated Government bonds may be a good suggestion. However the continuing low yields on offer arent very attractive.

It’s a blog post and the author follows the strategy he described. Nothing has changed.

People don’t hold short term government bonds for yield. People hold them for safety under a low probability high consequence scenario when financial institutions are going bankrupt. I don’t hold any corporate bonds, they would be useless.