Is my pot looking ok?

Anonymous101

MaxiRobriguez said:

It's purely up to you how far you can and want to push it. The further you are from accessing the money, the more risky it is to plough loads into it, because there's no certainty what the government will do in terms of age of access or taxing drawdown etc in the long future. However, if you're very close to 58, it may well be worth pushing the boat out as far as you can with your contributions, even so far as extending any outstanding mortgages to make up for the shortfall in cashflow until that point, because avoiding that 42% is significant.

You say its risky the further you are from 58. I agree its risky in terms of when you might be able to access that investment, however there is also significant risk that HRT relied will not be around forever so if you don't make use of it whilst you have opportunity to then you might end up having to contribute more in the long run. There is risk both ways.

MaxiRobriguez

Anonymous101 said:

Cammywatson033 said:

And I’ve just checked a payslip, my pension contributions are deducted before tax is taken 

So first step for me would be to contribute everything I earned above the higher rate threshold into the pension via sal sac.
If you earn £60k then you should be contributing 17% (16.66% rounded up) in order that you do not pay any higher rate tax. You employer contributions would be on top of this and prob capped at their 16%.

They'll probably find the employer contributions stop well before 16%. Maybe 10% if they're lucky.

There's also not that much difference in the gap between actual tax rates if you're salary sacrificing. Difference is only 10% (42% vs 32% dodge), so whilst good isn't going to make or break if they stop before reaching BRT/go further into. SIPP's a little more clear cut (40% vs 20% dodge).

There's are potentially some benefits of sacrificing enough to get into basic rate territory though, like being eligible for marriage allowance transfer.

Albermarle

They'll probably find the employer contributions stop well before 16%. Maybe 10% if they're lucky.

The OP gets 16% employer contributions . So along with the DB scheme he already has then he is well set for an early retirement !

mcooke999

I want to know what company he works for!

P911TRS

I’m work at an airport 

P911TRS

Yeah max company will pay in is 16%, that’s for employee contributions of 9%. I pay 10% as every pay rise I’m upping my pension contribution by 1%. So if I get a pay rise next year (highly doubt it due to covid) I will be paying in 11%

MrJamez

My employer (big contractor to the MOD) only contributes a maximum of 6%!

1813

Tbh this is what i need to know but what you've banked so far looks very good - you should have no problems, especially with the state pension added on for good measure.
I am 38 and i have a predicted income of 9k per annum from the state and a solid income from a db scheme in my job of about 4k that i was in for 10 years - I want to hit my 36k a year target but thatd be a big challenge and whilst I appreciate it is a controversial thing to mention, I am concerned about pensions right now as I am sure many are and how this will affect the present and impact on the future.
For example, my State forecast says it will pay estimated 9k a year based on 18 years work - but whether this will come to fruition is another thing entirely.
I am also worried about inflation linked aspect of my db pension - will this continue to be present through to retirement? Id like to know if I am on the right track myself. At 70 which would be the very latest I would want to retire, I would like to know if, for the time being, a State Pension of 9k, a DB pot of 4k and drawdown from a potential 50k pot is seeing me on the right track at 38 - I have done my age estimation and it says 92 so I am using that as a basis, so all in all about 16k. 
Think since ive worked since 21 i've done OK but I am interested to see what other people's views are on what I have outlined above.

P911TRS

Do you mean you have a 50k DC pot at the moment or a 50k pot come your retirement?

1813

Hi Cammy 
Based on what I messaged you on, I am hoping for 50k at retirement which wont do much, granted, but I think the burning questions are:
1. Will the state pension still exist in 2050?
2. Will pensions continue to increase over time?
3. Will the estimated state pension be honoured? 
Ive done the math and to reach a perceived target of 36k a year, id need a 300k+ pot. A very tough assignment but  doable perhaps. With my current investments, retiring at 60 might be possible but i'd need to do some ground work right now.