What % of salary do you put in your pension per month and why?

TheBanker

All this talk of FIRE reminds me of one of my university friends. His plan was to get a good graduate job, but carry on living a student lifestyle (shared house, beans on toast for dinner, making a pint last all night so as not to have to buy another one...). His logic was that if he did that he'd be able to retire at 40. 

I think his plan lasted for about six months, until he met a partner, who had different ideas. He's 44 now, paying a mortgage, not retired and wondering how much he needs to save to help his kids through uni (or driving lessons, first homes, or whatever direction life takes them in) when the time comes. 

He's happy enough but it's completely different to what he had planned. Luckily he does seem to enjoy his job!

BillTee

cloud_dog said:

65%, but I am nearing my R-Date so am shovelling it all in there.

Shovelling   Me too, I'm close so it's all in for me for the next 2-3 years.

Yorkshire_Dangermouse

george4064 said:

101% could just be reflecting using up previous years' allowance(s), obviously not sustainable year in-year out as you'll run out of carry over allowance.

Indeed - relatively short-term, now that I'm in the run-in to retirement, with increased AA, and no LTA, having used the full AA for a few years now.

DannyCarey

18, employer puts in 7 to make a nice 25%

I'm going to up mine to 20% from next month though. 

LeafGreen

Just increased mine to 40% total (includes employer 13%).  Mainly to stop myself from going into the higher rate tax band as I've been doing quite a bit of overtime recently and been getting more savings interest.  But also because I have "too much" (according to most received wisdom) in cash savings so pushing more into pension should adjust the balance a bit.

I can change my contributions every month if I want to so if overtime dries up I can step it right back down for a bit.

I am approaching 50 though and wanting to maximise how early I can retire should I get fed up of working altogether.

Albermarle

housebuyer143 said:

Albermarle said:

It’s an interesting balance, people tend to focus on having a large pot for retirement but do we focus and value that too much? I know people will disagree but you are only young once!

A lot if is down to your personality. Live for today type or a 'delayed gratification' type. There is a movement called FIRE- Financial Independence Retire Early, where they have good jobs, save like mad in their younger years and retire at 40 ( or earlier) . It is a bit extreme to say the least.

On the other side others work at least until state pension age, or even later,  because they can not afford to do otherwise. Not just low earners but some high earners with a high spend as well.

Clearly for most there is a happy medium in the middle. Average retirement age is around 62/62, although a bit earlier on this forum for many.

I'm not sure why everyone wants to rush to retire. I love my job and I can easily do it until I die, it's not manual at all. There is actually a guy working in my office who is 75 🤷‍♂️ he seems happy.

I work four hours a day now and would enjoy that in retirement also. Everyone I know who has retired has returned to some kind of work, not just for the money but for the social aspect too. 

Remember this is a pensions forum, so will inevitably have a higher proportion of people planning to build up a big pot and retire early.
I agree with other posters though that building up a big pot gives you the Financial Independence for you to choose what you want to do, rather than having a choice forced upon you.
Personally I was more concerned to have an escape route in case things started to go wrong at work . New manager, new owners, excess workload etc. In fact that never happened, but I had a job that involved regular travel, which all stopped with Covid. The thought of going back to those motorway jams, airport delays, hotels etc was partly why I decided to stop. Also of course because I could afford to. 

Exodi

Seeing people stating 20%,30%,40%+ in this thread has me rocking back and forward gripping my legs with my arms.

I am trying to remind myself that forum posters on MSE are not indicative of the general UK population.

"According to gov.uk, the average UK pension contribution is £2,700 for a single person per year. "
( https://moneynerd.co.uk/average-uk-pension-contribution/ )

From what I could check, this figure seems to be based on the 17_18 tax year. To compare apples with apples, the average UK earnings would have been £23,348 for a single person in the same year.

This means the average contribution would be ~11.5%. I will admit that my analysis has flaws - for starters, we don't know if the £2,700 contribution includes tax relief and also that employer contributions are made in addition to earnings. 11.5% is likely to be overstated and I'd think it very likely the average employee and employer contributions are both single digit percentages.

Sg28

Wow theres some great employer schemes on here!

Im 40 pay 10% into a sipp. Pot value is 42k. No employer contributions.

I really need to increase it dramatically. 

Yorkshire_Dangermouse

Exodi said:

Seeing people stating 20%,30%,40%+ in this thread has me rocking back and forward gripping my legs with my arms.

I am trying to remind myself that forum posters on MSE are not indicative of the general UK population.

"According to gov.uk, the average UK pension contribution is £2,700 for a single person per year. "
( https://moneynerd.co.uk/average-uk-pension-contribution/ )

From what I could check, this figure seems to be based on the 17_18 tax year. To compare apples with apples, the average UK earnings would have been £23,348 for a single person in the same year.

This means the average contribution would be ~11.5%. I will admit that my analysis has flaws - for starters, we don't know if the £2,700 contribution includes tax relief and also that employer contributions are made in addition to earnings. 11.5% is likely to be overstated and I'd think it very likely the average employee and employer contributions are both single digit percentages.

Aye - suspect that age and earnings are 'slightly' skewed here, and by virtue of that, perhaps employer contributions too.

Sg28

I made the mistake of starting a pension way too late. 
So Im starting a pension for my 6 year old son too.

Paying a lump sum of 2k and £25 month in. If he takes over 18 and keeps up at least the same amount until 57 it will give him near £250k.