Are my pensions going to be enough?

textbook

On course

https://forums.moneysavingexpert.com/discussion/comment/81862110#Comment_81862110

On course for full state pension

textbook

https://forums.moneysavingexpert.com/discussion/comment/81861916#Comment_81861916

Dunno where that is. Can I call payroll and ask?

QrizB

Sorry should have explained I get paid every two weeks. This paycheck is for two weeks work. So ivguess my monthly pension is 2x £55 so £110.

And have my own separate one I pay £120/month into.

OK, so you're currently earning (& living on) about £25k per year gross, about £19k pa net after tax, NI and pension contributions.

If you want to continue on a similar income in retirement, you'll need about £21k a year gross. The current full NSP is nearly £12k, so you'll need another £9k pa on top.

Today, per the HL annuity best buy table, £100k of pension savings would buy an RPI-linked annuity of £5346 pa for a healthy 65-yo. £9k would need ~£170k of pension savings.

You've currently got £17k saved, so to get to £170k by age 67 and assuming 2% real growth year-on-year you'll need to add maybe £600 a month, £7200 a year, until you're 67. That's £370 a month on top of the £230 that you're currently contributing.

(That might be out of reach for you as things currently stand, so do what you can for now and see if you can find a better-paying job.)

vacheron

https://forums.moneysavingexpert.com/discussion/comment/81862447#Comment_81862447

You could, but as your payroll says "AE Pension", my guess is that they will be paying no more than the minimum Auto Enrollment requirements.

You may be able to ask your employer to make additional contributions from your salary (and get the tax relief), but your employer is not obliged to pay any more unless your contract states something better.

You can find these requirements here: But the below frrom Moneyhelper reads a little clearer:

How much do I have to pay into a workplace pension?

The minimum contribution is a total of 8%, usually made up of:

• 5% from your wages: 
  • 4% from you, and
  • 1% from the government in tax relief.
• 3% on top from your employer. 

Our workplace pension contribution calculator will work out how much you and your employer will typically pay.  

The minimum contribution usually applies to anything you earn between £6,240 and £50,270 during the 2025/26 tax year (6 April 2025 to 5 April 2026). This is known as your ‘qualifying earnings’.

But your employer might use a different calculation based on ‘pensionable earnings’ instead. You might also be able to pay less than 5%, depending on your scheme. Your employer will be able to explain which rules apply to you.

eskbanker

Are my pensions going to be enough?

Enough for what?

Although there's some calculation of what might be needed to achieve a similar income post-retirement to what you currently earn, that may not be what you want/need, so a crucial part of pension planning is to model how much you think you'll need to live on (not just survival but actually enjoying life!) - for some that may be more than they're currently earning, whereas others plan to get by on less….

textbook

So the company increased my contributions to 6% but the companies contribution stays at 3% and won't be increased. I thought they'd have to increase theirs by law?

Is it worth me increasing just mine anyhow?

molerat

What the company must do was outlined above, anything above that is voluntary / contractual. You do need to increase what you pay into a pension so upping your work deductions is likely the simplest way.

textbook

https://forums.moneysavingexpert.com/discussion/comment/81881194#Comment_81881194

Shall I go above 6%?

vacheron

https://forums.moneysavingexpert.com/discussion/comment/81881207#Comment_81881207

As @eskbanker said 4 posts up, unless you have an idea how much money you require / desire in retirement, nobody (not even you) can tell if you need to increase your contributions further or not.

Many people are happy with no more than the state penion in retrement. They would say no.

Some people feel they can't survive on less than £30-40K per year. They would say yes.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81881175#Comment_81881175

There is no law to say they have to increase their contribution above the legal minimum, whatever you contribute.

Some companies will do it ( to a point), but many will not.