Whats considered a "good" employer pension? Me 5% employer 3%?

philveller

whatsthenews said:

JustAnotherSaver said:

Strange this. Wonder if most people on here are actually in decent paid jobs. Maybe. Maybe not. 
I suspect most that come here have an interest in I vestments, saving, DIY money managing etc and maybe these people are generally not the bottom-line kind of people. Again, just wonderings, I could be wrong. 

My workplace pension is bare minimum. They'd pay me zero if they could get away with it. Those I know are also paid the bare minimum. In fact I only know of 1 person really who is anything above minimum, the rest are minimum. 
My social circle does not really involve people earning 30k, 40k, 50k etc. We are generally minimum wage earners or maybe slightly above but not much. Coincidence that our pensions are as little as possible? Maybe, maybe not. 

I was wondering that too when people were saying they're paying 40 and 50% of their wages into their pension pot! At the end of the day your pension is a % of your wage, so if your wage is pretty low then pension's going to be low. Similarly when NHS staff got a 2% pay rise and people were singing and dancing in the streets.

It would be pretty hard to invest 40% or more of your salary at any age if you were earning less than 40k, a single person might be able to do it but it would be a pretty miserable life although a lot better than being that poor through debt.

I would suspect that only people like me getting close to retirement would save such a high ratio of their income, by close to retirement I mean within 10 years. I started increasing my pension savings substantially 5 years ago, effectively every annual inflation increase goes completely  to my pension, I have a few more years to go to meet my personal goals and I won't be rich in retirement but I will have full new state pension and the option to drawdown enough to make my total pension, state + private equal to about 2.5 times the state pension and I will have the flexibility to choose to drawdown a lot more some years, plus I should have a comfortable lump sum to enjoy in the earlier years of my retirement.

I'm quite old at the top of my profession, and a highish earner, but I didn't save anywhere near enough when I was younger hence the need to make it up now.

I think some other high earners might choose to save a lot into pension but most high earners would not need to sacrifice such a large proportion to still have substantial savings and really high earners in large corporate companies have remuneration packages that will use up their lifetime pension savings limits quickly and lots of other things like share options that would boost their wealth, they would not need to save such a large portion of their own income into pension.

You can also work out the upper limit, for people saving as much as 50% it would be about 80,000 a year as after that they would breach the 40,000 a year pension savings rule and there would be no tax benefit to saving more in a pension.
 

barnstar2077

philveller said:

whatsthenews said:

JustAnotherSaver said:

Strange this. Wonder if most people on here are actually in decent paid jobs. Maybe. Maybe not. 
I suspect most that come here have an interest in I vestments, saving, DIY money managing etc and maybe these people are generally not the bottom-line kind of people. Again, just wonderings, I could be wrong. 

My workplace pension is bare minimum. They'd pay me zero if they could get away with it. Those I know are also paid the bare minimum. In fact I only know of 1 person really who is anything above minimum, the rest are minimum. 
My social circle does not really involve people earning 30k, 40k, 50k etc. We are generally minimum wage earners or maybe slightly above but not much. Coincidence that our pensions are as little as possible? Maybe, maybe not. 

I was wondering that too when people were saying they're paying 40 and 50% of their wages into their pension pot! At the end of the day your pension is a % of your wage, so if your wage is pretty low then pension's going to be low. Similarly when NHS staff got a 2% pay rise and people were singing and dancing in the streets.

It would be pretty hard to invest 40% or more of your salary at any age if you were earning less than 40k, a single person might be able to do it but it would be a pretty miserable life although a lot better than being that poor through debt.

I would suspect that only people like me getting close to retirement would save such a high ratio of their income, by close to retirement I mean within 10 years. I started increasing my pension savings substantially 5 years ago, effectively every annual inflation increase goes completely  to my pension, I have a few more years to go to meet my personal goals and I won't be rich in retirement but I will have full new state pension and the option to drawdown enough to make my total pension, state + private equal to about 2.5 times the state pension and I will have the flexibility to choose to drawdown a lot more some years, plus I should have a comfortable lump sum to enjoy in the earlier years of my retirement.

I'm quite old at the top of my profession, and a highish earner, but I didn't save anywhere near enough when I was younger hence the need to make it up now.

I think some other high earners might choose to save a lot into pension but most high earners would not need to sacrifice such a large proportion to still have substantial savings and really high earners in large corporate companies have remuneration packages that will use up their lifetime pension savings limits quickly and lots of other things like share options that would boost their wealth, they would not need to save such a large portion of their own income into pension.

You can also work out the upper limit, for people saving as much as 50% it would be about 80,000 a year as after that they would breach the 40,000 a year pension savings rule and there would be no tax benefit to saving more in a pension.
 

I put half my salary away at the age of 44 on a low twenties wage.  I can do that though because I don't drive and my mortgage is practically non existent at this point (I overpaid from the onset.)  I don't have kids either.  Although, if I did I would plan to spend time with them doing things that didn't cost much money, as I would consider time together to be the most important thing.  As I would like to retire early though I am not planning on having children anytime soon.   It definitely can be done pleasantly on a low wage, but you have to have a certain philosophy and appreciate the simpler things in life.  Which I do, obviously. 

philveller

barnstar2077 said:

philveller said:

whatsthenews said:

JustAnotherSaver said:

Strange this. Wonder if most people on here are actually in decent paid jobs. Maybe. Maybe not. 
I suspect most that come here have an interest in I vestments, saving, DIY money managing etc and maybe these people are generally not the bottom-line kind of people. Again, just wonderings, I could be wrong. 

My workplace pension is bare minimum. They'd pay me zero if they could get away with it. Those I know are also paid the bare minimum. In fact I only know of 1 person really who is anything above minimum, the rest are minimum. 
My social circle does not really involve people earning 30k, 40k, 50k etc. We are generally minimum wage earners or maybe slightly above but not much. Coincidence that our pensions are as little as possible? Maybe, maybe not. 

I was wondering that too when people were saying they're paying 40 and 50% of their wages into their pension pot! At the end of the day your pension is a % of your wage, so if your wage is pretty low then pension's going to be low. Similarly when NHS staff got a 2% pay rise and people were singing and dancing in the streets.

It would be pretty hard to invest 40% or more of your salary at any age if you were earning less than 40k, a single person might be able to do it but it would be a pretty miserable life although a lot better than being that poor through debt.

I would suspect that only people like me getting close to retirement would save such a high ratio of their income, by close to retirement I mean within 10 years. I started increasing my pension savings substantially 5 years ago, effectively every annual inflation increase goes completely  to my pension, I have a few more years to go to meet my personal goals and I won't be rich in retirement but I will have full new state pension and the option to drawdown enough to make my total pension, state + private equal to about 2.5 times the state pension and I will have the flexibility to choose to drawdown a lot more some years, plus I should have a comfortable lump sum to enjoy in the earlier years of my retirement.

I'm quite old at the top of my profession, and a highish earner, but I didn't save anywhere near enough when I was younger hence the need to make it up now.

I think some other high earners might choose to save a lot into pension but most high earners would not need to sacrifice such a large proportion to still have substantial savings and really high earners in large corporate companies have remuneration packages that will use up their lifetime pension savings limits quickly and lots of other things like share options that would boost their wealth, they would not need to save such a large portion of their own income into pension.

You can also work out the upper limit, for people saving as much as 50% it would be about 80,000 a year as after that they would breach the 40,000 a year pension savings rule and there would be no tax benefit to saving more in a pension.
 

I put half my salary away at the age of 44 on a low twenties wage.  I can do that though because I don't drive and my mortgage is practically non existent at this point (I overpaid from the onset.)  I don't have kids either.  Although, if I did I would plan to spend time with them doing things that didn't cost much money, as I would consider time together to be the most important thing.  As I would like to retire early though I am not planning on having children anytime soon.   It definitely can be done pleasantly on a low wage, but you have to have a certain philosophy and appreciate the simpler things in life.  Which I do, obviously. 

That's impressive to do that at that age!
Kids come along at the oddest times in life, my first was in my late twenties and my youngest two were born when I was 47 and 50 respectively, so I still have two young kids as a youngish old man heading into retirement in a few years

barnstar2077

philveller said:

barnstar2077 said:

philveller said:

whatsthenews said:

JustAnotherSaver said:

Strange this. Wonder if most people on here are actually in decent paid jobs. Maybe. Maybe not. 
I suspect most that come here have an interest in I vestments, saving, DIY money managing etc and maybe these people are generally not the bottom-line kind of people. Again, just wonderings, I could be wrong. 

My workplace pension is bare minimum. They'd pay me zero if they could get away with it. Those I know are also paid the bare minimum. In fact I only know of 1 person really who is anything above minimum, the rest are minimum. 
My social circle does not really involve people earning 30k, 40k, 50k etc. We are generally minimum wage earners or maybe slightly above but not much. Coincidence that our pensions are as little as possible? Maybe, maybe not. 

I was wondering that too when people were saying they're paying 40 and 50% of their wages into their pension pot! At the end of the day your pension is a % of your wage, so if your wage is pretty low then pension's going to be low. Similarly when NHS staff got a 2% pay rise and people were singing and dancing in the streets.

It would be pretty hard to invest 40% or more of your salary at any age if you were earning less than 40k, a single person might be able to do it but it would be a pretty miserable life although a lot better than being that poor through debt.

I would suspect that only people like me getting close to retirement would save such a high ratio of their income, by close to retirement I mean within 10 years. I started increasing my pension savings substantially 5 years ago, effectively every annual inflation increase goes completely  to my pension, I have a few more years to go to meet my personal goals and I won't be rich in retirement but I will have full new state pension and the option to drawdown enough to make my total pension, state + private equal to about 2.5 times the state pension and I will have the flexibility to choose to drawdown a lot more some years, plus I should have a comfortable lump sum to enjoy in the earlier years of my retirement.

I'm quite old at the top of my profession, and a highish earner, but I didn't save anywhere near enough when I was younger hence the need to make it up now.

I think some other high earners might choose to save a lot into pension but most high earners would not need to sacrifice such a large proportion to still have substantial savings and really high earners in large corporate companies have remuneration packages that will use up their lifetime pension savings limits quickly and lots of other things like share options that would boost their wealth, they would not need to save such a large portion of their own income into pension.

You can also work out the upper limit, for people saving as much as 50% it would be about 80,000 a year as after that they would breach the 40,000 a year pension savings rule and there would be no tax benefit to saving more in a pension.
 

I put half my salary away at the age of 44 on a low twenties wage.  I can do that though because I don't drive and my mortgage is practically non existent at this point (I overpaid from the onset.)  I don't have kids either.  Although, if I did I would plan to spend time with them doing things that didn't cost much money, as I would consider time together to be the most important thing.  As I would like to retire early though I am not planning on having children anytime soon.   It definitely can be done pleasantly on a low wage, but you have to have a certain philosophy and appreciate the simpler things in life.  Which I do, obviously. 

That's impressive to do that at that age!
Kids come along at the oddest times in life, my first was in my late twenties and my youngest two were born when I was 47 and 50 respectively, so I still have two young kids as a youngish old man heading into retirement in a few years

I have always tried to keep my outgoings low, so when I had my wake up moment and switched to cramming as much into my pension as possible it didn't really take as much effort as you would think.

I am single at the moment, and as it is impossible to date right now, I think I will be safe on the kids front for quite some time.

All of you that are married or have long term partners should feel blessed, I assure you lockdown is no fun on your own with no prospect of companionship in the near future.  The words "no fun" are perhaps an understatement. 

HouseTargaryen

6% from the employer is typical in my experience. My current employer pays up to 11% if I pay 6%. I think 3% is a joke. 

AlanP_2

HouseTargaryen said:

6% from the employer is typical in my experience. My current employer pays up to 11% if I pay 6%. I think 3% is a joke. 

Certainly not fantatstic but better than the 0% it was for many people before Auto Enrolment.

JoeCrystal

AlanP_2 said:

Certainly not fantatstic but better than the 0% it was for many people before Auto Enrolment.

Mostly you can see a massive increase in the number of private-sector employees since 2012. According to ONS, roughly 57% of all employees paying into their DC pension in the country only see the auto-enrolment minimum in 2019 with 21% of all employees getting 4% to 8% contributions from their employers. If you get more than 8% from your employer, you are in the top 22%. If you are luckily enough to get 20% plus, you are in the top 1-2% of all employees paying into DC pension.

The simple fact is that auto-enrollment contributions are a norm sadly for most private-sector employees. 

AlanP_2

JoeCrystal said:

AlanP_2 said:

Certainly not fantatstic but better than the 0% it was for many people before Auto Enrolment.

Mostly you can see a massive increase in the number of private-sector employees since 2012. According to ONS, roughly 57% of all employees paying into their DC pension in the country only see the auto-enrolment minimum in 2019 with 21% of all employees getting 4% to 8% contributions from their employers. If you get more than 8% from your employer, you are in the top 22%. If you are luckily enough to get 20% plus, you are in the top 1-2% of all employees paying into DC pension.

The simple fact is that auto-enrollment contributions are a norm sadly for most private-sector employees. 

I agree, but my point was that even 3% is better than the previous default position for many smaller private-sector employers of a 0% contribution as they didn't offer a pension scheme at all.

Dated May 2018 - Since AR introduced in 2012 9.5million people had been auto-enrolled. 

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/workplacepensions/articles/pensionparticipationatrecordhighbutcontributionsclusteratminimumlevels/2018-05-04

Alexland

AlanP_2 said:

I agree, but my point was that even 3% is better than the previous default position for many smaller private-sector employers of a 0% contribution as they didn't offer a pension scheme at all.
Dated May 2018 - Since AR introduced in 2012 9.5million people had been auto-enrolled.

Yes a huge success for the government in getting millions of people and employers to make a hopelessly low level of contribution to reduce their dependence on means tested benefits in retirement.

Intoodeep

Our Company put in 10%