My pension calculations

Mr_Jones

Doonhamer said:

Would a pot of £135k plus £500 a month for 10 years not get you closer to £300k than the £200k you mention?

Yes I hope so with a favourable stock market over the next few years

Mr_Jones

Flugelhorn said:

the "annual increase" on the DB pension could make a significant difference - have you got the details of what that entials?

No but I will now look to find out - thanks

Mr_Jones

Dazed_and_C0nfused said:

Mr_Jones said:

Thanks for your reply

I started working for the company aged 22 after college and stayed until 30 - at that time I took out a private pension with Allied Dunbar now Zurich = 50K currently.  I don't pay into that currently but it increases as per the funds it is invested in

I re-joined at 31 and still there now at 57.  When I came back I joined their DC scheme from 1998 to 2014 when it closed.  The document states My Defined Benefit Pension value = £7089 so this just covers 16 years of my working life

The new DC scheme opened in 2014 and in 11 years I have build up a pot of £135K

I don't believe my DB pension is linked to my current salary - I am told it increases by a small percentage each year linked to inflation.  The document states Membership Status - Special Deferred

I think you could well be underplaying the annual pension the DB pension will pay.

I would say it's well worth you finding out exactly how that works as even if the annual pension was expected to be £7,089 10 years ago the annual revaluation will have a noticeable impact.

Also worth checking exactly how it revalues.

Checking that further thanks

Mr_Jones

Albermarle said:

 so this pot should reach around £200,000 so an annuity could pay approx. £8500 per annum

Probably current annuity rates will slowly drop over the next year or two ( but might not) . Also it depends a lot on the type of annuity ( inflation linked? spouse pension ? etc )

 

Zurich Private Pension - I no longer contribute.  Scheme currently holds £50,000 - this would give an annuity of around £2000 per annum if taken now

Zurich have largely withdrawn from the pensions market and have old fashioned products. If you decide to drawdown this pension, then probably best to move it first.

 

Yes agree about Zurich - currently checking out alternatives - thinking with a pot that small I can be a little aggressive

Mr_Jones

Albermarle said:

Phossy said:

To echo a couple of others, I'd get an update on your DB pensions worth. I have a deferred pension from 2015 and it has grown by ~ 28% since then.

The problem can be getting this info out of some DB schemes. It can be easier to calculate an approx amount yourself, if you have a copy of the scheme rules and inflation figures can be googled. 

Will request a copy

Mr_Jones

DRS1 said:

You are doing your sums on a very conservative basis which is probably sensible.  One question is why are doing them?  Is it to work out if you have enough to live on at 67 if everything carries on as is?  Or is it to see if you should be taking some action now?

If it is action now then one place to look would be the Zurich pension - what is it invested in what are the charges?  Would it do better if eg it was transferred into your main DC scheme?  Or to a SIPP if you don't want all your eggs in one basket.  From what @Albemarle says you will probably need to transfer it sometime to get drawdown.

Another thing to check is what happens when you retire under the main DC scheme?  If it is an occupational scheme does it do drawdown or will you need to set up a new scheme at retirement to handle that?

Good question regarding sums and why I am doing them.  I guess I am fed up at work now and possibly too late to change jobs.  So I will start looking at my total pension if I retire at 67, then possibly look at it again if I retire at 60.  I will also consider going part time and possibly going to work with my other half who is a child minder who is so busy and turning business down almost every week.  I just don't want to risk too much just now as my daughter is still in school (aged 16)