Average pension pot on retirement and whats your aim ?

Albermarle

Some of these statistical figures do not include DB pensions , or in the case of the ONS household wealth survey , they include a value for  private sector DB, but not public sector.
Probably you can find many valid figures with a wide range, depending on what factors are taken into account.
Also many people rely on other or additional sources of retirement income ; DB pension  part time job; savings; other investments ; BTL etc so the size of your DC pension pot would not necessarily define your retirement income.

Most of these spending surveys say a couple needs £30K to live a middling retirement .
So after SP kicks in , they would need a pension pot ( assuming little in other investments and savings and no other income ) of around £300K . If they want to retire earlier then more like £500K, again assuming they are mainly relying on their pension pot .

For a more comfortable retirement , £45K for a couple is mentioned so if they retire early 60's then something approaching a Million would be needed , if solely relying on a DC pot and SP's.

Workerdrone

noclaf said:

40 and currently net value of 2 DC pensions is around £110k.
The plan is to contribute fairly aggressively over the next few years to push this up..for context in 2016/17 my total monthly contributions inc employer matched via sal sac were between £200-300 per month....this year it's been between £800-£3000 for some months so I am going in big but hoping that by doing that for a few years it helps to recover my pension situation.
£500k pot at 57 would be a reasonably good achievement....doubt I will ever get close to LTA...it would involve taking significant risk IMO to reach it but never say never!

For context Im 46 (just) with £230k in DC pots. Down from £250k at the end of December. I put in £1234 a month via Sal sacrifice. I also put about £75 a month into a DC for my wife. I am trying to raise this a little at a time. She has an NHS DB pension at 60/67

hugheskevi

Albermarle said:

in the case of the ONS household wealth survey , they include a value for  private sector DB, but not public sector.

Do you have a reference for that? My understanding was that public service pensions are included, but not any State Pension.

Albermarle

hugheskevi said:

Albermarle said:

in the case of the ONS household wealth survey , they include a value for  private sector DB, but not public sector.

Do you have a reference for that? My understanding was that public service pensions are included, but not any State Pension.

In the ONS household wealth survey it seems to imply this but not 100% clear.

On average households with employee heads had higher levels of pension wealth than the self-employed, which was most likely driven by higher participation in private pensions (94% had private pension wealth compared with 79% for self-employed). This group also held larger pension pots on average, a consequence of defined benefit pensions being available to employees but not for the self-employed.

However in a related publication by the Resolution foundation based on ONS data, it is more clear ( page 9) 

The-UKs-wealth-distribution.pdf (resolutionfoundation.org)

SouthCoastBoy

michaels said:

I guess also important is whether we are talking about finances of an individual or a couple.  2 x £1m pots is very different to only 1....

Yes, very pertinent point. In my case I am planning for £1m pot and my wife will have a db pension of approx 9k per annum from age 60, when I will be 63

CookieMonster

JoeCrystal said:

SouthCoastBoy said:

Not sure what the average is, everybody has their own spending and requirements profile. Personally if you have no db pension I consider £1million is a reasonable pot for somebody retiring at 60.

Hahaha. Here I am thinking that £250,000 is a reasonable pot for someone retiring at 60, especially with state pension on the way at 68. 

£250K can be a reasonable pot, depending on your retirement strategy - running it down to zero in your 70's (short-mid term) or managing the drawdown for the longer term.
And above the UK average, as shown in previous posts.

bostonerimus

The size of the pot you need depends on how much you spend, what other sources of income you have ie SP or part time work, inflation, how long you'll live and how the stock market performs. But if you wanted an inflation linked, 25k/year for 30 years and had a single SP of 9k/year then in the first year you'd need to produce an inflation linked 16k/year and there's a good chance of doing that with 16k/0.04 = 400k. If you had two SPs then the require pot shrinks to 175k.

These are very rough and ready estimates and depend on historical data for stock market returns and inflation so they could be complete rubbish. The "0.04" divisor is particularly debatable.

michaels

SouthCoastBoy said:

michaels said:

I guess also important is whether we are talking about finances of an individual or a couple.  2 x £1m pots is very different to only 1....

Yes, very pertinent point. In my case I am planning for £1m pot and my wife will have a db pension of approx 9k per annum from age 60, when I will be 63

So £1m pot for you and £450k (equivalent) for the DW, what age would that support retirement from for both of you?

merlin321

Our pot for DC IS £160000. However our target income of 30k/yr is made up of other sources. 
A modest DB pension of a combined 12k, assuming we last 25 years that gives a pot of £300k. Together with State pensions boosting income over next few years the smallish DC pot is fine for us. I would worry more if we had retired at 60 and had to rely on just a self invested/ managed Sipp as is the case now for most people retiring in the future.

SouthCoastBoy

michaels said:

SouthCoastBoy said:

michaels said:

I guess also important is whether we are talking about finances of an individual or a couple.  2 x £1m pots is very different to only 1....

Yes, very pertinent point. In my case I am planning for £1m pot and my wife will have a db pension of approx 9k per annum from age 60, when I will be 63

So £1m pot for you and £450k (equivalent) for the DW, what age would that support retirement from for both of you?

From aged 60 for us both. We both receive full state pension at 67