Where do I begin to start saving at 36 towards Pension

IloveElephants

Brynsam said:

IloveElephants said:

But people have said to me to open a private pension and I should pay for expert bespoke financial advice. I would like to hopefully have my property paid for before retirement. So where do I start and can I add £50 per month in and will this be enough ? assuming I want a pension of £30,000 per year taken inflation into account.

I want to open a pension pot within the next month and get started as I wasted too much time already. 

The age at which you intend to retire is crucial. If you plan to work until you are 75, you might get closer to your £30K a year, but somehow I suspect that's not what you have in mind.

Make sure you've joined whatever pension your employer offers under auto-enrolment regulations, even if you think your job won't last, and get maximum contributions from them. That is a private pension, so you can safely ignore the 'people' telling you to open one. Add more if you can afford to do so.

Thank you Brynsam, can I ask so is the employer pension the best for me even if I think my job wont last at least the company will top up and match what ever I put in? and I receive maximum contributions. Thank you for your infomation

IloveElephants

Notepad_Phil said:

steampowered said:

The general rule of thumb is to save as a percentage of your income, half your age, when you start saving. For you that would mean saving 18% of your salary (including employers' contributions).

And that is based on retiring at state retirement age rather than any early retiring at 60 etc. Retiring early means that you need to have the means to live until you start getting your state pension, which is likely to mean a much bigger percentage needs to be put away.

You say you want a retirement income of £30k but on what basis do you say that e.g. is that your current income and so you think you can only survive if you get the same amount, or have you seen that figure somewhere and decided that is what is needed, etc.

If £50 a month is really all you can afford to put away then I think you need to look at where you are currently spending your money and decide what you can do to reduce your expenditure. That way you can start putting extra money away, and just as importantly, you probably won't need to have as big a retirement income as you won't find yourself needing all those little extras that you hopefully find that you can give up or reduce the need for.

Thanks Phil, the 30k figure came with inflation so it may be the equivalent of 15k in todays money. But yes Im sure I could put more into my pension monthly, £50 is the bare minimum, I hopefully could add £150 per month 

IloveElephants

Albermarle said:

I want to open a pension pot within the next month and get started as I wasted too much time already

Although it has been explained above already , just to be clear you have a pension already that you are paying into at work .

If you want to add more than you do now , just request to your employer to take more from your salary to put in it . When you leave this employer the pension comes with you .

If you really want a private pension of £20Kpa on top of your state pension then you will need to build up a pension pot of around £600,000 and with the best will in the world you will not get anywhere near that adding £100 per month .

Thank you Albermarl, very true, I will speak to my employer next week and hopefully he can tell me how big my pension pot is currently and how much ive paid into it so far and if he could increase putting more into it from my salary. I currently dont know how much is even in my pension pot all I know money gets deducted from the salary monthly. Thank you

IloveElephants

ComicGeek said:

The problem is that a lot of people will hear the above, and think why bother then. We need to educate better. I only started my pension in my first job because the MD said it was stupid not to - 7% employers contributions, and I topped up to 10% without really understanding how it works. 

Thank you Comic geek, may I ask what is your age and how much are you paying in currently monthly? I need to have a talk with my employer and find out about my pension pot and if he could increase it to 10% and if I join a new job also request they do the same. I am 36 years old 

Thank You 

Albermarle

, I will speak to my employer next week and hopefully he can tell me how big my pension pot is currently and how much ive paid into it so far and if he could increase putting more into it from my salary. I currently dont know how much is even in my pension pot all I know money gets deducted from the salary monthly. Thank you

Normally you find out what is in your pension pot by getting the info direct from the pension provider, not from your employer.

When you leave this employer the pension comes with you .

You should have been given a username and password to access the providers website. If you did not receive this /mislaid it then you can ask your employer to give it to you again .

Of course you do need to ask your employer if you want to increase your contributions as they will have to arrange for them to be deducted from your salary . It is possible that you may be restricted to changing the % only once or twice a year.

ComicGeek

IloveElephants said:

ComicGeek said:

The problem is that a lot of people will hear the above, and think why bother then. We need to educate better. I only started my pension in my first job because the MD said it was stupid not to - 7% employers contributions, and I topped up to 10% without really understanding how it works. 

Thank you Comic geek, may I ask what is your age and how much are you paying in currently monthly? I need to have a talk with my employer and find out about my pension pot and if he could increase it to 10% and if I join a new job also request they do the same. I am 36 years old 

Thank You 

My current situation isn't relevant to yours, as I run my own business now and pay significant employer contributions from it, probably 3 times what I did as an employee and the same for my wife as well. I'm 39, and have been running my own company for 12 years now.

however, when I first started working nearly 20 years ago, 7% employers contribution was the norm in our engineering industry. I was very lucky! But the main point was that I committed to pension payments before I even received my first pay check, which meant that I never noticed it - it's too easy to spend up to your salary, so I also put a percentage of any pay rise into my pension as well. But I was very lucky that I had a supportive employer who took the time to educate me, even when it cost them more money!! Not sure many of those exist now...

steampowered

Your pension is really just like a bank account. Think of it like a bank account that you and your employer pay into each month, albeit you can't withdraw from the account until you reach retirement. It's worth finding out who the provider is and trying to get the details to log in online.

When you move to a different employer, if your new employer uses a different pension provider, you can transfer the funds from your older provider to the new provider. This is worth doing because it means you have just the one pension (rather than 10 different pensions if you have 10 different employers who all used different pension schemes during your working life!).

Sorcerer2018

I think it's great you are thinking about your pension, i didn't start a pension until i got into my 30s just like you. Even if it's only £50 a month, it's a start. But yes you do have to be a bit more realistic on your goals. Some great advice for yo here so far.

IloveElephants

Albermarle said:

, I will speak to my employer next week and hopefully he can tell me how big my pension pot is currently and how much ive paid into it so far and if he could increase putting more into it from my salary. I currently dont know how much is even in my pension pot all I know money gets deducted from the salary monthly. Thank you

Normally you find out what is in your pension pot by getting the info direct from the pension provider, not from your employer.

When you leave this employer the pension comes with you .

You should have been given a username and password to access the providers website. If you did not receive this /mislaid it then you can ask your employer to give it to you again .

Of course you do need to ask your employer if you want to increase your contributions as they will have to arrange for them to be deducted from your salary . It is possible that you may be restricted to changing the % only once or twice a year.

Thanks Albermarle, you have been very helpful and I will now take up what you have said and get the ball rolling. 
Thanks

IloveElephants

ComicGeek said:

IloveElephants said:

ComicGeek said:

The problem is that a lot of people will hear the above, and think why bother then. We need to educate better. I only started my pension in my first job because the MD said it was stupid not to - 7% employers contributions, and I topped up to 10% without really understanding how it works. 

Thank you Comic geek, may I ask what is your age and how much are you paying in currently monthly? I need to have a talk with my employer and find out about my pension pot and if he could increase it to 10% and if I join a new job also request they do the same. I am 36 years old 

Thank You 

My current situation isn't relevant to yours, as I run my own business now and pay significant employer contributions from it, probably 3 times what I did as an employee and the same for my wife as well. I'm 39, and have been running my own company for 12 years now.

however, when I first started working nearly 20 years ago, 7% employers contribution was the norm in our engineering industry. I was very lucky! But the main point was that I committed to pension payments before I even received my first pay check, which meant that I never noticed it - it's too easy to spend up to your salary, so I also put a percentage of any pay rise into my pension as well. But I was very lucky that I had a supportive employer who took the time to educate me, even when it cost them more money!! Not sure many of those exist now...

Thanks Comicgeek, hope your business is doing well at this time of crisis and your able to keep your head above water.