Transfer existing pots into current plan?

QrizB

Jmgasparin said:

QrizB said:

Jmgasparin said:

Simon11 said:

Lots of great points here which answer your question.
Great to see your light bulb moment in 2022, taking an interest in pensions but you need to push yourself a bit more.
Based on the numbers above, you are going to struggle to retire well or retire early. At the moment putting in a combined 10% of salary into your pension is quite low and if possible, you should look to increase this if possible to meet your retirement goals.
Over the Christmas period, well worth spending a quiet moment opening up a spreadsheet and running some calculations! Yourself will thank you in 15-20 years time!

At the moment is 15% combined, around £800/month, will go to 22.5% after 2 years, £1200 roughly (without taking into account any salary increases).
I like a spreadsheet so I’ll take on your advice thanks!

A (very) rough guide is that, if you're just starting to save for retirement, you should aim to be saving "half your age" in %.

As you're 36, that would suggest 18%. 15% now might be a little low, but increasing to 22.5% in 2 years (and continuing until you're 68) should be sufficient.

That’s very useful, thanks. By continuing until I’m 68, do you mean continue to increase to be saving half my age, so around 30% when I’m 60?

The (again, very rough) guide doesn't expect you to increase the % once you start saving. So continuing to save at least 18% until you reach normal retirement age, which I expect to be 68 for you.
But be sure to review things every few years; you might find you're ahead of plan, so you can pay less or retire early. Or you might not.

Albermarle

Jmgasparin said:

QrizB said:

Jmgasparin said:

Simon11 said:

Lots of great points here which answer your question.
Great to see your light bulb moment in 2022, taking an interest in pensions but you need to push yourself a bit more.
Based on the numbers above, you are going to struggle to retire well or retire early. At the moment putting in a combined 10% of salary into your pension is quite low and if possible, you should look to increase this if possible to meet your retirement goals.
Over the Christmas period, well worth spending a quiet moment opening up a spreadsheet and running some calculations! Yourself will thank you in 15-20 years time!

At the moment is 15% combined, around £800/month, will go to 22.5% after 2 years, £1200 roughly (without taking into account any salary increases).
I like a spreadsheet so I’ll take on your advice thanks!

A (very) rough guide is that, if you're just starting to save for retirement, you should aim to be saving "half your age" in %.

As you're 36, that would suggest 18%. 15% now might be a little low, but increasing to 22.5% in 2 years (and continuing until you're 68) should be sufficient.

That’s very useful, thanks. By continuing until I’m 68, do you mean continue to increase to be saving half my age, so around 30% when I’m 60?

Just for info the average retirement age is around 63 and many people on these forums have retired a few years before that ( or plan to) . This means maybe 5 years or more before any state pension kicks in. The bigger your pension pot the easier it is to retire early.

If L&G PMC 2050 - 2055 Target Date Fund 3 is known to perform better than the tailored plan with Pension Bee or the Aviva plan then it would make sense to transfer

As explained already in some detail, it depends what you mean by 'better'
For example one person may prefer to go higher risk ( = high equity %) as most likely this will result in higher growth in the long run. However another person may find the volatility of such investment funds disturbing and prefer something a bit more stable even if it brings lower growth. So 'better' means different things to both these people.
Now you are taking an interest it is probably better to do some more research/reading ( including this and the Investment forum) before doing anything about consolidating your pensions.

El_Torro

You say you are currently contributing 5% and your employer is contributing 10%, then in 2 years you will put in 7.5% and your employer will put in 15%. What’s stopping you contributing more now? It’s worth doing, even if your employer won’t put in more than 10% for now. I guess there might be employers out there that don’t let you contribute more than 5%, I’ve never come across one though.

If you contribute more now you may be able to contribute enough to qualify for child benefit, so you might not be much worse off than you are today, with the bonus of having more money in your pension.

Jmgasparin

El_Torro said:

You say you are currently contributing 5% and your employer is contributing 10%, then in 2 years you will put in 7.5% and your employer will put in 15%. What’s stopping you contributing more now? It’s worth doing, even if your employer won’t put in more than 10% for now. I guess there might be employers out there that don’t let you contribute more than 5%, I’ve never come across one though.

If you contribute more now you may be able to contribute enough to qualify for child benefit, so you might not be much worse off than you are today, with the bonus of having more money in your pension.

I can contribute more than the 5%. I have been playing with a salary calculator increasing my contributions and if I do 15% instead of 5% I’m only 
£150 worse off in terms of take home pay (as I would only be taxed on a small portion of the child benefit  rather than the full amount as this tax year) but I would be increasing pension contributions by £525/month so it’s almost a no brainer.

The only doubt I have is that apart from the £2074 for the child benefit that I’ll need to pay I have also been hit with another tax bill of £1440 for paying less tax than I should in my previous job so I don’t want my disposable income to be reduced too much