Success Stories - Pensions

MTB1986

handful said:

I'm in the fortunate position of having a modest DC pension pot of around £300k + a DB of around £4k but recently received news of an unexpected inheritance (but not received yet) of about £260k ish. I was already thinking about when I could retire and this makes it possible far sooner at the spending level that I wanted to try and maintain.  Apart from paying off the last bit of my mortgage (about £38k on property value of £625k) and a further £25k of HP on a motorhome I should still be able to invest enough to allow retirement in the next couple of years.

I’m amused that a £300k DC pot is considered to be modest! I would be ecstatic if mine was so modest

LookingForward20

Followed this forum since my mid to late 20's. Took some excellent advice from it over the years but the overriding takeaway was make the sacrifice early and let compound interest do all the heavy lifting long term.

Currently aged 38 with £260k in a SIPP (my only pension).

My goal is maximise on the recent pension allowance changes so I aiming for £60k per annum contributions for as long as I can or until the government change it. Plan is to retire in my early 50's on savings and then access my SIPP all being well. 

As I said, this forum really opened my eyes to starting saving early and aggressively. 

MallyGirl

I have always liked this simple explanation of the power of compounding:

https://www.autowealth.sg/blog/invest_early_harness_the_power_of_compounding.php

SpeedSouth

41, and beginning to see some success in it..  Back in 2016 I had around £26,000 in my 2 DC pensions.  Due to some serious contributing and some market success I've seen the following yearly increases.
2017 - £28,356.84
2018 - £78,907.36
2019  - £101,426.29
2020 - £158, 540
2021 - £200,713
2022 - £276,754
2023 - £341,352

Workplace pension shows contributions since 2016/7 have been £243,546 with a value today of £293,453 so nearly £50K uplift in those 7 years.  I started later than I should have done at around 33 but very low contributions to be begin with.  

Further behind where I could be with the value of hindsight and early years compounding I missed out on, but hoping I can get close to a 55 retirement age if I can continue the high % going in.

One success I'll take is to try and make sure my kids start investing in a pension with their first job, so they end up in a better position with compounding doing more for them.

Jez56uk

My story… 

Started a DC pension in my early thirties and it’s been the best thing I ever did to give me financial independence now I’m retired.  Joined a large IT company in 1995 just as they were closing their DB scheme to new entrants.  To compensate, the Workplace DC scheme was made very attractive with the company putting in 70% and the employee 30% up to a maximum of 20% of pensionable salary.  Being a higher rate tax payer I always contributed the maximum amount I could plus £300 a month in AVCs.  Pot was invested in the default lifestyle option because I didn’t know any better at the time and the pension provider didn’t promote self-select as an option

Pot grew significantly until 2012 when disaster struck.. I got divorced and despite my wife at the time saying she wanted nothing from my pension, her lawyer saw differently with the result that a pension sharing order was executed which saw  around a third of my pot disappear.  At 56 this blew a big hole in my retirement plan so I took a bold action and moved off the lifestyle option and invested 80% in a mix of global equity funds.. both trackers and active with 20% in bonds. The pot did well with annualised growth of ~9% until late 2021. To mitigate the market downturn caused by COVID I moved the entire pot into cash and bonds in March 2020, buying back into equities in July 20.  Because markets recovered quickly I’m not sure whether this was financially astute, however I could sleep at night!!  

I took VR in March 2021 at age 65 and officially retired.  In December I transferred the Workplace pension to a Fidelity SIPP to prepare for drawdown. Invested 97% in a range of medium to high risk global equity funds (65% Index Trackers / 35% Active)  and 3% in cash. Staying out of bonds for the time being because of market volatility.   Pot is currently £1,220K so very glad the LTA has been abolished.  I’m taking UFPLS as and when needed to supplement State Pension and income from rental property.   

At the recommendation of the company’s Financial Adviser I opted to contract out of SERPS and this has resulted in a second workplace pension worth £78,000 that grows by a minimum of 4% annually until age 75 at which point I’ll transfer it to Fidelity.  Strangely I get more than the basic State Pension despite having been contracted out.. let’s hope it’s not a mistake!! 

Qyburn

I've got a failure story, sort of related to the "how often do you check your pension" thread.  I didn't check mine at all frequently and when I did it seemed I always struck unlucky in that the investments were doing badly at that time. This was accompanied by increasingly pessimistic projections, for example forecast annuity was originally £35K at age 60, by 2019 it was forecast as £6390 at age 65.

This all gave me the impression that increasing pension contributions would be throwing good money after bad, and that we needed to use other ways to fund our retirement. I can't cry too much because we have got their now, but I could have saved a lot more basic rate and HR tax if I'd paid more earlier.

Not really sure what the moral is, don't look at your pension at all except together with an adviser maybe?  On the other hand our adviser continued to assure us that our endowment was on track, right up until it clearly went sour - luckily I didn't follow their advise and switched our mortgage partially and then fully into repayment.

enthusiasticsaver

The biggest success we had was with my DHs occupational pension. Until 2008 he was paying 7% and his employer matched it and had paid into a booster scheme since joining in 1982. In 2008 his company scheme moved from DB to DC scheme with an incentive if DH paid 10% per annum of his salary in his employer would pay 20% reducing by 1% per year for the next 8 years to 12%. He actually took early retirement in 2016 with 26 years of frozen DB benefits and a DC pot of around £500k. It was a game changer for us and enabled us to retire at 58. 

handful

MTB1986 said:

handful said:

I'm in the fortunate position of having a modest DC pension pot of around £300k + a DB of around £4k but recently received news of an unexpected inheritance (but not received yet) of about £260k ish. I was already thinking about when I could retire and this makes it possible far sooner at the spending level that I wanted to try and maintain.  Apart from paying off the last bit of my mortgage (about £38k on property value of £625k) and a further £25k of HP on a motorhome I should still be able to invest enough to allow retirement in the next couple of years.

I’m amused that a £300k DC pot is considered to be modest! I would be ecstatic if mine was so modest

It's modest compared to many on here and using the rcommended SWR of 4% that would only give me a £12k income compared to my current £60k!. It would be fine if I was happy to wait for SP but funding the 7 year gap would have been tricky without the incoming inheritance. Apologies if it came across as condescending.

ex-pat_scot

I've gone from £260,000 in March 2015, when i consolidated all previous pots, to about £975,000 today.
I've kept things generally in global ETFs, and used all of my annual allowance until now.
The markets have been pretty benign overall, which has helped
I'm not quite yet where I want to be - my first "hurdle" is getting to 55, and then getting to the old LTA so that I can take max TFLS cash.

Scrudgy

• Started at age 20 putting £50 per month into an Abbey Life private pension as employer did not have a scheme.
• At age 24 added another £40 per month into Abby Life private pension.
• Somewhere along the road opted out of serps and money went to a Prudential scheme
• Somewhere else along the road, contracted back into serps.
• At age 28 stopped paying into private scheme as started a new job with a Aviva money purchase scheme, me 2.5%, employer 9%
• Age 42 left that employer to go to another with a Mercer managed scheme, me 6%, employer 6%
• Company got bought over and changed to a new scheme managed by Willis Towers Watson, me 6%, employer 6%
• Consolidated all schemes into newest scheme as there were no fees to pay, which was £12k private pension one, £7k private pension two, £26k prudential serps pot, £20k mercer scheme, £161k aviva scheme.
• At this point I elected to to come out of default life styling plan and went for self select strategy of 50% global and 50% UK funds.
• Once news about Brexit started getting a bit wobbly I went to 100% global equities.
• For last 6 years have almost maxed out the £40k allowance with salary sacrifice
• Pot got to £1100k a couple of years ago, and it is still there now, so down about 7-8% from its high with contributions keeping it at its high.
• Currently 57. I plan to retire in about a year or so, but will keep the strategy of 100% global equities in trackers with some cash to fund a year or two or poor returns. Rational is that if the market drops 50%, I can still get by sharpening my pencil, and if the market grows, then great.
• Also should have 2 x full state pensions in 2033, and my wife's SIPP which will be depleted in about 6 years as it is being drawn down each year at her £12,570 personal allowance, and is currently going into savings.