What % do you pay?

LarryR

Wow, reading through these posts I had no idea people were putting so much into their pensions, how do you afford it, what with living, etc.?

My employer currently puts 12% in and last month I upped my contribution from 6% to 12%. I am 49. According to my last statement I have £252k in the pot (1yr ago it was £215k). Am I on target for an ok retirement at, say, 60? Or do you think I am in trouble/way off?

Thanks

jimi_man

LarryR wrote: »

Wow, reading through these posts I had no idea people were putting so much into their pensions, how do you afford it, what with living, etc.?

My employer currently puts 12% in and last month I upped my contribution from 6% to 12%. I am 49. According to my last statement I have £252k in the pot (1yr ago it was £215k). Am I on target for an ok retirement at, say, 60? Or do you think I am in trouble/way off?

Thanks

Well it depends entirely on how much you want to live off in retirement. Also whether you have any other pensions, a partner with pensions, other savings etc. Quite a broad question!!!!

You can do a state pension check and see how much you are due from that, which is around 67 but might be 68 for your age I think. So retiring at 60 is 7/8 years until you get that. If you wanted £25K a year then that's £200K required just for those 8 years. Thereafter with the state pension it would be less, especially if you have a partner also with the state pension.

Conversely you might only need half that amount because you are happy with £12K a year. Once you clarify your 'number' then it becomes much easier.

JoeCrystal

LarryR wrote: »

Wow, reading through these posts I had no idea people were putting so much into their pensions, how do you afford it, what with living, etc.?

My employer currently puts 12% in and last month I upped my contribution from 6% to 12%. I am 49. According to my last statement I have £252k in the pot (1yr ago it was £215k). Am I on target for an ok retirement at, say, 60? Or do you think I am in trouble/way off?

Thanks

With care! You have to bear in mind that most posters in this pension forum are someone who has higher than average interest in retirement provision. I want to point out that with your £252k pension pot at 49, you are doing much better than median person aged between 45 to 54 back in 2016, such person would only have 82k in their pension pot.

LarryR

jimi_man wrote: »

Well it depends entirely on how much you want to live off in retirement. Also whether you have any other pensions, a partner with pensions, other savings etc. Quite a broad question!!!!

You can do a state pension check and see how much you are due from that, which is around 67 but might be 68 for your age I think. So retiring at 60 is 7/8 years until you get that. If you wanted £25K a year then that's £200K required just for those 8 years. Thereafter with the state pension it would be less, especially if you have a partner also with the state pension.

Conversely you might only need half that amount because you are happy with £12K a year. Once you clarify your 'number' then it becomes much easier.

I think, worryingly, my number may be about £75-80k to live on. I will still have 9yrs left on my mortgage when I'm 60 (currently costing £1700pm, 2.14% fixed), and with private healthcare (5k for me and kids, 7k for wife), groceries (6k), gas/electricity/water (3k), home/car/dog insurance, holiday, Council/road tax/petrol, clothes/eating out, etc, it quickly (scarily) adds up.

On the bright side, I just remembered I've got two other personal pensions lying dormant at the moment, one with 95k in it (looks like it is dropping 500pa in fees!) And second one with £25k. Should I look to transfer these into my current employer pension?

LarryR

You can do a state pension check and see how much you are due from that, which is around 67 but might be 68 for your age I think. So retiring at 60 is 7/8 years until you get that.

Just checked my state pension and it said I'm currently looking at 158pw, however, if I pay NI contributions for 3 more years, than I can get the maximum 168pw. Does that mean my NI should go down after 3 years (I'll be about 52/53 years old then), as paying more won't increase my state pension?!

adonis10

LarryR wrote: »

Just checked my state pension and it said I'm currently looking at 158pw, however, if I pay NI contributions for 3 more years, than I can get the maximum 168pw. Does that mean my NI should go down after 3 years (I'll be about 52/53 years old then), as paying more won't increase my state pension?!

Wishful thinking! Just think of it as normal taxation after that point.

adonis10

LarryR wrote: »

I think, worryingly, my number may be about £75-80k to live on. I will still have 9yrs left on my mortgage when I'm 60 (currently costing £1700pm, 2.14% fixed), and with private healthcare (5k for me and kids, 7k for wife), groceries (6k), gas/electricity/water (3k), home/car/dog insurance, holiday, Council/road tax/petrol, clothes/eating out, etc, it quickly (scarily) adds up.

On the bright side, I just remembered I've got two other personal pensions lying dormant at the moment, one with 95k in it (looks like it is dropping 500pa in fees!) And second one with £25k. Should I look to transfer these into my current employer pension?

Wow, £75-80k per annum? I think with numbers like that you should probably get face to face financial advice as that is an epic amount over, say, 25 years of retirement (£1.9-2m..), although I imagine that will taper down with age due to the mortgage dropping off, possibly fewer holidays the older you get etc.


Nice to find £120k of old pensions down the back of the sofa, though :beer:

jimi_man

LarryR wrote: »

I think, worryingly, my number may be about £75-80k to live on. I will still have 9yrs left on my mortgage when I'm 60 (currently costing £1700pm, 2.14% fixed), and with private healthcare (5k for me and kids, 7k for wife), groceries (6k), gas/electricity/water (3k), home/car/dog insurance, holiday, Council/road tax/petrol, clothes/eating out, etc, it quickly (scarily) adds up.

On the bright side, I just remembered I've got two other personal pensions lying dormant at the moment, one with 95k in it (looks like it is dropping 500pa in fees!) And second one with £25k. Should I look to transfer these into my current employer pension?

Ok, so quite a lot more than the figures I put. Obviously those figures are relatively high, though I'm guessing you or both of you, earn a reasonable amount, which means that the amount going into your pension is pretty high too.

It's fairly easy to plug it all into a retirement calculator online and to see how close/far you you are. I suppose the options in the event of any shortfall are broadly, to reduce the amount of spending, increase the amount of pension provision or work longer.

As the poster above said, you are better than a lot of others at your age, though of course it's not really a competition and retirement provision is very much a personal thing. There are people on here with £12K of pension income a year who are apparently happy and can't understand what people spend their money on, and there are others for whom a comfortable retirement lifestyle is £50K+ a year.

I can't tell you whether to amalgamate the pensions. Administrately it probably makes it easier, and if you are spending on fees with no apparent benefit, then certainly something would need to be done. However it may be better to speak to someone more qualified about that - maybe your own employers pension provider?

LarryR

jimi_man wrote: »

Well it depends entirely on how much you want to live off in retirement. Also whether you have any other pensions, a partner with pensions, other savings etc. Quite a broad question!!!!

You can do a state pension check and see how much you are due from that, which is around 67 but might be 68 for your age I think. So retiring at 60 is 7/8 years until you get that. If you wanted £25K a year then that's £200K required just for those 8 years. Thereafter with the state pension it would be less, especially if you have a partner also with the state pension.

Conversely you might only need half that amount because you are happy with £12K a year. Once you clarify your 'number' then it becomes much easier.

jimi_man wrote: »

Ok, so quite a lot more than the figures I put. Obviously those figures are relatively high, though I'm guessing you or both of you, earn a reasonable amount, which means that the amount going into your pension is pretty high too.

It's fairly easy to plug it all into a retirement calculator online and to see how close/far you you are. I suppose the options in the event of any shortfall are broadly, to reduce the amount of spending, increase the amount of pension provision or work longer.

As the poster above said, you are better than a lot of others at your age, though of course it's not really a competition and retirement provision is very much a personal thing. There are people on here with £12K of pension income a year who are apparently happy and can't understand what people spend their money on, and there are others for whom a comfortable retirement lifestyle is £50K+ a year.

I can't tell you whether to amalgamate the pensions. Administrately it probably makes it easier, and if you are spending on fees with no apparent benefit, then certainly something would need to be done. However it may be better to speak to someone more qualified about that - maybe your own employers pension provider?

I just plugged my figures into a pension calculator (thanks for the suggestion) on the Money Advice Service and it said that at my current levels, I'm on target to get a pension income of £31k at age 60, going up to £35k when my state pension kicks in when I'm 67.

They say on the website that most people aim for around 50% of their salary for retirement, for me this would be about £50k. It looks like I either aim to retire at 65, at my current rate, or increase my contributions significantly.

Is the amount that is forecast for my retirement income inflation adjusted, do you know? In other words, when I'm 67 (in 18yrs time), will even £50k be sufficient?

jimi_man

LarryR wrote: »

I just plugged my figures into a pension calculator (thanks for the suggestion) on the Money Advice Service and it said that at my current levels, I'm on target to get a pension income of £31k at age 60, going up to £35k when my state pension kicks in when I'm 67.

They say on the website that most people aim for around 50% of their salary for retirement, for me this would be about £50k. It looks like I either aim to retire at 65, at my current rate, or increase my contributions significantly.

Is the amount that is forecast for my retirement income inflation adjusted, do you know? In other words, when I'm 67 (in 18yrs time), will even £50k be sufficient?

I don't know if it includes inflation tbh? What does it say on the website?

Just be a little wary of the 'one size fits all' approach, such as 50% of your income in retirement. It really depends what you want to do.

However, if nothing else, it gets you thinking about things and how much you do actually need and therefore can plan better.