Is my pot looking ok?

P911TRS

hyperhypo said:

I believe you are doing very well. I didn't start contributing to any pension until i was nearly 40...then i had a further 12 years contributing into a DB (final salary scheme) until that ended when work was outsourced. Heck  I didn't even know what a DB pension was when i first go the job.  Since that date i've had a further 8 years contributing a company DC scheme , at roughly same level as you, with employer contribution at a matched 10% plus a 5% contribution towards the employee amount...i paid a bit more in latterly too, so overall about 27-30%.

Contributions were made via salary sacrifice so lowering exposure to higher tax rate, and the pot of money i i have accumulated , plus some redundancy money and combining an old ex SERPS scheme has allowed me to effectively retire now at 61, ie it has provided a buffer until my DB scheme starts in a couple of years. I don't believe i've missed out in doing so , although i would certainly echo others comments about spending to enjoy and travel etc, whenever we're allowed back into Europe.

One point others had made..about how your  scheme is invested, is it in a  Company default lifestyle fund for example.

With hindsight i wish i had simplified my last years of saving into the DC scheme and not chopped and changed around fund allocations as much as i did. I took some paid advice and promptly ignored it , not disastrously but if were doing it again, starting of with a simple, coherent globally diversified plan that could have been adjusted to risk as a got a bit older, might have been a better way to start. Keeping it simple and understandable.  The learning and lessons don't stop...next job for me is to work out how to remodel the pot for drawdown, and indeed where to invest last chunk of pension cash !

Sorry, I’ve only just logged in today and just saw your post. To be honest I don’t know how my pension is invested, I can log in and check what’s in my pot but i don’t have a clue about changing investment strategies. I was advised once that I should change to ‘high risk’ as I’ve got a long time till retirement and can ride out the bumps with high risk investment, and once I get closer to retirement age I should go low risk. I’ve no idea if this is good advice or not 

jampot7us

Cammywatson033 said:

hyperhypo said:

I believe you are doing very well. I didn't start contributing to any pension until i was nearly 40...then i had a further 12 years contributing into a DB (final salary scheme) until that ended when work was outsourced. Heck  I didn't even know what a DB pension was when i first go the job.  Since that date i've had a further 8 years contributing a company DC scheme , at roughly same level as you, with employer contribution at a matched 10% plus a 5% contribution towards the employee amount...i paid a bit more in latterly too, so overall about 27-30%.

Contributions were made via salary sacrifice so lowering exposure to higher tax rate, and the pot of money i i have accumulated , plus some redundancy money and combining an old ex SERPS scheme has allowed me to effectively retire now at 61, ie it has provided a buffer until my DB scheme starts in a couple of years. I don't believe i've missed out in doing so , although i would certainly echo others comments about spending to enjoy and travel etc, whenever we're allowed back into Europe.

One point others had made..about how your  scheme is invested, is it in a  Company default lifestyle fund for example.

With hindsight i wish i had simplified my last years of saving into the DC scheme and not chopped and changed around fund allocations as much as i did. I took some paid advice and promptly ignored it , not disastrously but if were doing it again, starting of with a simple, coherent globally diversified plan that could have been adjusted to risk as a got a bit older, might have been a better way to start. Keeping it simple and understandable.  The learning and lessons don't stop...next job for me is to work out how to remodel the pot for drawdown, and indeed where to invest last chunk of pension cash !

Sorry, I’ve only just logged in today and just saw your post. To be honest I don’t know how my pension is invested, I can log in and check what’s in my pot but i don’t have a clue about changing investment strategies. I was advised once that I should change to ‘high risk’ as I’ve got a long time till retirement and can ride out the bumps with high risk investment, and once I get closer to retirement age I should go low risk. I’ve no idea if this is good advice or not 

You have done so well.. How long have you had the pension and with whom!

kuratowski

It's mainly about paying more in, and the number of years you are invested for.   OP benefits from a good employer pension contribution rate and is also funding the pot well from their employee contributions.  Do this consistently over a few decades and the pension pot will grow to be substantial.  Whereas if you only pay in a small amount, then whatever you invest in, using whatever provider, it won't be reaching 6 figures.

P911TRS

So what I’ve said might have been a bit misleading, sorry. After speaking with a few people at work I now understand my pension a bit more. So I don’t have a pot of £245000 as such, when I started with my employer I was 23 years old and on a final salary pension, my employer closed this last year when I was 34. I was sent a transfer value for my 12 year pension of £245000 or an annual salary on retirement (age 55) of around £9000. I’m now in a DC pension scheme and paying in my 10% with a company contribution of 16%, that bit is all correct. Sorry if I’ve mislead people, I’m only fully understanding this now haha. So yes, my transfer value last year was £245000 for my 12 year DB pension and since that closed I have been paying into a DC pot with 26% contributions per month. Can I technically count this as having a £245000 pot or not?

JoeCrystal

No it does not. You are really lucky to have a DB pension scheme! Generally speaking it is counted as how much it paid out per year. So you got £9000 index linked payable for life. (Maybe more if it still linked to your current salary) What is your retirement age in DB pension scheme?

P911TRS

My retirement age for my DB scheme was 55

JoeCrystal

Cammywatson033 said:

My retirement age for my DB scheme was 55

Really? If the default retirement age for your DB scheme is 55 then getting index-linked joint-life annuity of £9,000 at 55 today would cost roughly £509,337. You have done really well both DB and DC pension schemes with generous employer contribution as well.

mcooke999

Cammywatson033 said:

So what I’ve said might have been a bit misleading, sorry. After speaking with a few people at work I now understand my pension a bit more. So I don’t have a pot of £245000 as such, when I started with my employer I was 23 years old and on a final salary pension, my employer closed this last year when I was 34. I was sent a transfer value for my 12 year pension of £245000 or an annual salary on retirement (age 55) of around £9000. I’m now in a DC pension scheme and paying in my 10% with a company contribution of 16%, that bit is all correct. Sorry if I’ve mislead people, I’m only fully understanding this now haha. So yes, my transfer value last year was £245000 for my 12 year DB pension and since that closed I have been paying into a DC pot with 26% contributions per month. Can I technically count this as having a £245000 pot or not?

OK so the £245k valuation at 35y/o is making sense now lol. Alarm bells rang for me when you said you didn't know how it was invested, my first thoughts were, how has this person amassed £245k without knowing how he's done it

Still, you're in a very fortunate position regardless of your age so don't take it for granted!

Who is your employer out of interest?

couriervanman

It always amuses me when someone comes on asking if pension pot is big enough for age/retirement date.........and its a usually a whopping big pot,big contributions/employer contributions plus they have a large cash pot in an ISA as well as large house worth £500k with a mortgage of £100k. I'm sure they know its big enough and will last through retirement but just want to see who has the biggest

andrew_m

My employer thinks they are the bees knees because they contribute 5% - is that sort of double digit contribution (let alone 16%) common?