How good is my work pension?

[Deleted User]

Hi,

I was hoping someone could tell me how good my company stakeholder pension is (also referred to as the Norwich Union Stakeholder Pension scheme) and what type of lifestyle it may afford when the time comes 65 years old or 2048.

I've currently got a "Balanced investment strategy", which from the start of the plan to 10 years before retirement pays 100% into a Balanced Managed Fund.

From 10 to 5 years before retirement 100% of the contributions will then be invested in the Defensive Managed Fund.

From 10 to 5 years before retirement 100% of the fund will then switch to the Defensive Managed Fund.

From 5 years to retirement 75% of contributions will be invested in the Deposit Fund and 25% in the Retirement Protection Fund.

From 5 years before retirement date 75% of the fund will then switch each month to the Deposit Fund and 25% to the Retirement Protection Fund.

All funds are in their "series 3" range of funds.

I'm 24, earn £20,000 and pay 5% of that into my pension. Work then matches this with another 5%.

I've been paying into it since October 2006 when I was earning £17,500. I then started to earn £20,000 from October 2007.

How does this work pension compare to other pensions? Is it good / bad / or just okay?

Should I be considering to up my pension contributions? (Work will only match upto 5% so if I increased this anymore they wouldn't match it)

I am saving however it'll all be going to a mortgage deposit in a few years time and I'm not sure after that how much I'll be able to afford to save, in general.

Thanks

fraser

future value - best thing to do is ask for a forecast on the pension value from the provider i.e. Norwich Union

have a look at what level of income it says and work out if you feel if that is enough.

have a look at pension calcualors http://www.pensioncalculator.org.uk/ run some numbers to see what you may want to put in

the good news is that you have started early compared to some, myself included who did not start a pension until my mid / late 20's.

how does it compare? hard to say, probably about the middle as per most employer schemes, the fund it invests into may well provide a solid return, it appears to be a cautious investment fund so you may want to look at the other funds that may be on offer as you are investing for quite some time here (most pension funds offer a range of funds to invest in low to high risk)

the free money from your emplyer is always good to have

also if you are unsure about the scheme and want to look at others see an ifa (unbiased.co.uk )

[Deleted User]

It's looking like a very difficult task to forecast what I may get.

I've looked at the documentation I've received with the pension and if my earnings grow by 4% each year and the investment by 7% then the pension fund would be £643,000. How could I forecast the effect of inflation?

Thanks for the suggestion of pensioncalculator.org.uk but this doesn't seem to consider what happens when your earnings, in general, go up each year.

Either way it's looking something like £150ish. I don't suppose there's an average earnings on pensions but does this sound about right?

I suppose what I'm getting at is should I just stop thinking about it for now, let it do it's thing at 5% contributions and be assured, as much as you can be, that they'll be an average (for want of a better term) amount of money at the time?

fraser

your pension provider has an obligation to provide forecasts

have a look at the HL calculator, question to ask is would I be happy surviving on the salary show after putting in your figures, the calculkator takes account of inflation

http://www.h-l.co.uk/pensions_and_retirement/interactive_calculators.hl

if your earnings go up, then your employers contribution usually remains the same but obviously 5% of more base salary is more. most of the calculators assume that you will increase your contribution over time and inline with inflation