Pension Newbie - is my auto-enrollment going to be enough? Future proofing

anxiousfirsttimer

Hi All,
I've been working since I left university in 2015 but have only recently started thinking about the future and my pension etc.
I'm currently on auto-enrollment with my employer - I put in 8% they put in 12% meaning my monthly contributions are £816. 
I'm 27, hoping to semi retire at 55 (I'd like to go to part-time local and use the down time follow a passion).
I suppose I would just like some advice on what would be good to consider in terms of:

• My pot is sitting at approx £11k, I have another pension for £5k with my previous employer - is £816 a decent amount to chuck at this pension or should I try for more?
• Am I silly to completely rely on this pension (I'm hoping to stay with my employer long term now), should I have other investments?

Things to note would be that at 55 I would hope to be mortgage free, and pretty comfortable with not "wanting" all the luxury crap I buy now lol I think we could comfortably live on 20k a year, but I'd like to aim for 30-40k just to make life a little more enjoyable. I do have a fiance, husband to be this year actually, but I am the breadwinner so feel some kind of obligation to get this all in tick now for our future. I currently save any spare cash we have at the end of the month from our joint account in premium bonds, although have only been doing this for 2 months so we're sitting at £1150 which I know isn't much! Any advice - thoughts, stuff I haven't thought about would be appreciated - although laymans terms would be great as I'm not very knowledgable!

Dazed_and_C0nfused

Am I silly to completely rely on this pension (I'm hoping to stay with my employer long term now), should I have other investments?

You aren't though are you.

You already have £5k in another fund which might be useful at some point, not maybe as a permanent income stream but as a temporary bridge between stopping full time work and your main pension(s) coming into payment.

And you can expect £9k or so from the State Pension.

anxiousfirsttimer

Dazed_and_C0nfused said:

Am I silly to completely rely on this pension (I'm hoping to stay with my employer long term now), should I have other investments?

You aren't though are you.

You already have £5k in another fund which might be useful at some point, not maybe as a permanent income stream but as a temporary bridge between stopping full time work and your main pension(s) coming into payment.

And you can expect £9k or so from the State Pension.

True - I didnt consider state pension! 
I think because the figure of 5k is low in comparison to what I'd like to drawdown on at retirement I don't consider it as a meaningful amount. But true it can boost as a temporary bridge - thanks!

Albermarle

Normally a workplace pension is the best vehicle for long term retirement savings , although it is best to have some savings /investments outside in case you need fund before you retire. An emergency cash savings fund is recommended. For the pension you get tax relief benefit on your contributions and if your contributions are made via salary sacrifice you save on NI contributions as well. More importantly you also  get free money from your employer . In your case the employer is quite generous adding 12%, as they are only legally obliged  to contribute 3% . If you ever change jobs you should be aware that a new employer maybe not be so generous. Overall adding 20% a month in total is good and puts you on the right track. 
One important point is that within a pension , your money is actually invested in funds linked to the financial markets. In most pensions you have a choice of funds ( can be just a handful or quite a lot) . If you do not choose then your money goes into a default fund and this might not be the best for your age or your risk appetite. Normally for younger people it is better to be in higher risk/higher potential growth funds because you have many years to ride out any volatility in the markets.
Can you say who the pension provider is and if you have on line access to your pension ?
Also the same for your older £5K pension .

anxiousfirsttimer

Albermarle said:

One important point is that within a pension , your money is actually invested in funds linked to the financial markets. In most pensions you have a choice of funds ( can be just a handful or quite a lot) . If you do not choose then your money goes into a default fund and this might not be the best for your age or your risk appetite. Normally for younger people it is better to be in higher risk/higher potential growth funds because you have many years to ride out any volatility in the markets.
Can you say who the pension provider is and if you have on line access to your pension ?
Also the same for your older £5K pension .

My £5k pension is with XPS - I have absolutely no idea what it's invested in. I've tried to transfer it over before but XPS were being difficult with forms etc and I was lazy
So my current pension is with Standard Life - I spoke to a colleague before who's a little more knowledgable on investments and he explained the whole you want to do high risk now and low risk later, so I guess that's one thing I'm slightly clued up on!
If the below sounds ridiculous it's because I don't know what I'm doing 
It says my Employers portfolio is split into the following funds and my risk level is 6:
SL Vanguard FTSE UK All Share Index Pension Fund 50.5%
SL Vanguard FTSE Developed World ex UK Pension Fund 49.5%
I have the option to chose new funds, but that all seems a little too advanced for me just now

crv1963

anxiousfirsttimer said:

Dazed_and_C0nfused said:

Am I silly to completely rely on this pension (I'm hoping to stay with my employer long term now), should I have other investments?

You aren't though are you.

You already have £5k in another fund which might be useful at some point, not maybe as a permanent income stream but as a temporary bridge between stopping full time work and your main pension(s) coming into payment.

And you can expect £9k or so from the State Pension.

True - I didnt consider state pension! 
I think because the figure of 5k is low in comparison to what I'd like to drawdown on at retirement I don't consider it as a meaningful amount. But true it can boost as a temporary bridge - thanks!

The 5k may seem low now but in 30 years time it will have grown through compounding, in addition your current pension fund will not only have grown but you will have continually added to it. I would suggest that you look at the whole picture- emergency fund, husband to be pension- we are in the position that I will be a taxpayer in retirement and even if she transferred to me some of her personal allowance Mrs CRV will be a none taxpayer. Having a good savings rate going into htb pension would be a thing I would suggest you look at- retirement as a couple is a joint venture. Then look at funding the gap between reducing to part time and full retirement- possibly a Lifetime ISA as that also gets a boost- go for things that offer free money before other savings funds, but be sure that you can afford to have the money tied up- do you plan a family - if so do you want money locked away?

anxiousfirsttimer

crv1963 said:

The 5k may seem low now but in 30 years time it will have grown through compounding, in addition your current pension fund will not only have grown but you will have continually added to it. I would suggest that you look at the whole picture- emergency fund, husband to be pension- we are in the position that I will be a taxpayer in retirement and even if she transferred to me some of her personal allowance Mrs CRV will be a none taxpayer. Having a good savings rate going into htb pension would be a thing I would suggest you look at- retirement as a couple is a joint venture. Then look at funding the gap between reducing to part time and full retirement- possibly a Lifetime ISA as that also gets a boost- go for things that offer free money before other savings funds, but be sure that you can afford to have the money tied up- do you plan a family - if so do you want money locked away?

True although I'm not under the assumption it will be worth more than 10k... Maybe I'm wrong :P
I haven't actually looked through htb pensions, I know he puts in roughly 4% and his employer matches - think he's with Scottish Widow. He's not savvy with any of this stuff, so I doubt this is something he really cares about!
Potentially have a plan for a family, but I'm quite cost concious when it comes to having children & I don't want a lifestyle change (I may change my mind in a few years though)
Lifetime ISA could potentially be a good option, will actively look into this.

The wedding is consuming a lot of our disposable at the moment, and next year we're taking a year to enjoy life and not stress on the savings! However 2022 will be back to saving saving saving! Ideally would like to be in the situation where we have approx £1000 joint a month to divvy out into savings account, dependant on what I find when I get detective on htb pension!

Albermarle

My £5k pension is with XPS - I have absolutely no idea what it's invested in. I've tried to transfer it over before but XPS were being difficult with forms etc and I was lazy

Not sure how you went about the transfer but normally you ask the scheme you want to transfer into to organise the transfer, and usually there is no need to have any contact directly with the scheme you are transferring from , although they can ask you to sign something in some cases.

Risk level 6 ( out of 7) and those types of funds are good for someone your age .

The only 'worry' would be that you are 50% invested in UK , which is too much . Despite what we were told about Brexit we are a relatively small fish in a big sea and normally should be 25% max for UK , some would say less. 

atush

20% of your income into a pension at over 800 per month isnt bad going if you ask me.

But apart from the wedding funds you do need cash emergency savings, S&S isas as well.

If it is enough will all depend on how it is invested, and how much you will need to live on.

Paul_Herring

> I'm 27, hoping to semi retire at 55

Something not yet mentioned - if the pension age changes come in 2028, you're not going to be able to access your pension until at least 58.