What % of income should I be contributing?

cazmanian_minx

I know that the rule of thumb is you should halve your age on the date you start your pension and put that percentage of your income into it, but what happens if your contributions have been a bit patchy?

My pension history to date:

1996 (aged 21) - about 11 months of contributions into KPMG's pension scheme.

1997 to 1999 - no contributions made to any scheme, wasn't eligible for HMV scheme until I'd been there a year and didn't join straight away when I became eligible.

1999 to 2006 - 7 years 8 months contributions into the EMI scheme, then the HMV Group scheme. Contributions from KPMG transferred in.

2006 to current - went self-employed, no contributions made to any scheme.

I'm now going to start a SIPP. I'm leaving the earlier contributions in the HMV Group final salary scheme, but how much should I be contributing to the SIPP? I'm currently 32 - should it be 16% (half my age now), 10.5% (half my age when I made my first pension contributions) or 12% (half my age when I started making regular contributions)?

Caz

dunstonh

You find out what income your current provision will give you. You decide what income you want in retirement and then you fund to meet that shortfall.

The percentage/age rule wont work in your case (and at best its only a guide). Plus, being self employed, you wont be gaining any allowance for second state pension so you will be missing about £3k a year income from there as well which you need to fund yourself.

cazmanian_minx

Thank you, that makes a *lot* of sense. Think I've got it worked out now!

Caz