Calculating Pension Pot

Hugh_Mungus

Hi all,

I had a question regarding pension calculators.

My workplace pension via salary sac(I had another thread and wasn't sure if it was Salary Sac, and it is) is giving me the calculation of: (based on a retirement age of 68/current age of 30)
Fund value at retirement: £461,029.53
Tax Free Cash: £115,257.38
Projected Annual: £9139.69
on a current salary of £24,720

This is based off the these contributions:
My contribution: £113.30 5.5%
Company: £113.30 5.5%
NI Supp: £15.64
total: £242.24 11.76%
at a net cost to me of £77.04

However I have popped my numbers into various calculators online and get a figure close to £140k with around £35k tax free.

I am booked into a slot for our monthly pension meeting at my work for next month to ask about those projections, but was wondering if there was anything obvious I had missed based off these huge differences.

Side note I have increased my percentage to 9.5%, to make 15%(my work max is 5.5% for my years of service which does not come into play until Nov)

Thanks

MaxiRobriguez

You're not accounting for compounding.

I assume you're doing is: current pot + (242*12*38) = £140k.

What the provider is doing is: current pot + (242*12*4.65%)*38 = £460k

AKA, adding 4.65% every year in compound interest that you will supposedly make from the underlying investments.

I guessed your current pot is £30k.

Hugh_Mungus

Thanks, that looks a lot more appealing.

When I first got those figures from several calculators I was shocked at the difference.

I have increased my contributions, so those numbers will improve.

Thanks