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  • FIRST POST
    • AnxiousTheElephant
    • By AnxiousTheElephant 17th Nov 19, 5:37 PM
    • 52Posts
    • 41Thanks
    AnxiousTheElephant
    What % do you pay?
    • #1
    • 17th Nov 19, 5:37 PM
    What % do you pay? 17th Nov 19 at 5:37 PM
    Just wondering what % everyone pays into their work pension?

    My employer sets us up at 5% but I'm debating increasing this..
Page 6
    • jimi_man
    • By jimi_man 28th Nov 19, 1:29 PM
    • 265 Posts
    • 350 Thanks
    jimi_man
    I paid 11% for about 25 years and then 13% or so for the last 5. It was a final salary public sector pension so I don’t know what the employer contribution was, but it paid out a 2/3 pension when I left, so I imagine fairly substantial.

    I then paid 40% into a DC pension for three years (agency contractor so no employer contribution). However it was by salary sacrifice so I did benefit from saving 40% tax, 12% Nat Insurance and 13.8% Employer Nat Insurance.

    Currently paying 5.45% into CS Alpha (plus a further 3.4% for early payment) with the employer contribution set at a notional 20 something %, which obviously means very little.

    Still paying into DC pension though not as much, and not salary sacrifice so only 40% tax savings.
    • LarryR
    • By LarryR 28th Nov 19, 9:31 PM
    • 30 Posts
    • 3 Thanks
    LarryR
    Wow, reading through these posts I had no idea people were putting so much into their pensions, how do you afford it, what with living, etc.?

    My employer currently puts 12% in and last month I upped my contribution from 6% to 12%. I am 49. According to my last statement I have £252k in the pot (1yr ago it was £215k). Am I on target for an ok retirement at, say, 60? Or do you think I am in trouble/way off?

    Thanks
    Last edited by LarryR; 28-11-2019 at 11:00 PM.
    • jimi_man
    • By jimi_man 29th Nov 19, 7:56 AM
    • 265 Posts
    • 350 Thanks
    jimi_man
    Wow, reading through these posts I had no idea people were putting so much into their pensions, how do you afford it, what with living, etc.?

    My employer currently puts 12% in and last month I upped my contribution from 6% to 12%. I am 49. According to my last statement I have £252k in the pot (1yr ago it was £215k). Am I on target for an ok retirement at, say, 60? Or do you think I am in trouble/way off?

    Thanks
    Originally posted by LarryR
    Well it depends entirely on how much you want to live off in retirement. Also whether you have any other pensions, a partner with pensions, other savings etc. Quite a broad question!!!!

    You can do a state pension check and see how much you are due from that, which is around 67 but might be 68 for your age I think. So retiring at 60 is 7/8 years until you get that. If you wanted £25K a year then that's £200K required just for those 8 years. Thereafter with the state pension it would be less, especially if you have a partner also with the state pension.

    Conversely you might only need half that amount because you are happy with £12K a year. Once you clarify your 'number' then it becomes much easier.
    • JoeCrystal
    • By JoeCrystal 29th Nov 19, 9:07 AM
    • 2,100 Posts
    • 1,516 Thanks
    JoeCrystal
    Wow, reading through these posts I had no idea people were putting so much into their pensions, how do you afford it, what with living, etc.?

    My employer currently puts 12% in and last month I upped my contribution from 6% to 12%. I am 49. According to my last statement I have £252k in the pot (1yr ago it was £215k). Am I on target for an ok retirement at, say, 60? Or do you think I am in trouble/way off?

    Thanks
    Originally posted by LarryR
    With care! You have to bear in mind that most posters in this pension forum are someone who has higher than average interest in retirement provision. I want to point out that with your £252k pension pot at 49, you are doing much better than median person aged between 45 to 54 back in 2016, such person would only have 82k in their pension pot.
    • LarryR
    • By LarryR 29th Nov 19, 9:42 AM
    • 30 Posts
    • 3 Thanks
    LarryR
    Well it depends entirely on how much you want to live off in retirement. Also whether you have any other pensions, a partner with pensions, other savings etc. Quite a broad question!!!!

    You can do a state pension check and see how much you are due from that, which is around 67 but might be 68 for your age I think. So retiring at 60 is 7/8 years until you get that. If you wanted £25K a year then that's £200K required just for those 8 years. Thereafter with the state pension it would be less, especially if you have a partner also with the state pension.

    Conversely you might only need half that amount because you are happy with £12K a year. Once you clarify your 'number' then it becomes much easier.
    Originally posted by jimi_man
    I think, worryingly, my number may be about £75-80k to live on. I will still have 9yrs left on my mortgage when I'm 60 (currently costing £1700pm, 2.14% fixed), and with private healthcare (5k for me and kids, 7k for wife), groceries (6k), gas/electricity/water (3k), home/car/dog insurance, holiday, Council/road tax/petrol, clothes/eating out, etc, it quickly (scarily) adds up.

    On the bright side, I just remembered I've got two other personal pensions lying dormant at the moment, one with 95k in it (looks like it is dropping 500pa in fees!) And second one with £25k. Should I look to transfer these into my current employer pension?
    • LarryR
    • By LarryR 29th Nov 19, 10:31 AM
    • 30 Posts
    • 3 Thanks
    LarryR
    You can do a state pension check and see how much you are due from that, which is around 67 but might be 68 for your age I think. So retiring at 60 is 7/8 years until you get that.
    Just checked my state pension and it said I'm currently looking at 158pw, however, if I pay NI contributions for 3 more years, than I can get the maximum 168pw. Does that mean my NI should go down after 3 years (I'll be about 52/53 years old then), as paying more won't increase my state pension?!
    • adonis10
    • By adonis10 29th Nov 19, 10:34 AM
    • 1,691 Posts
    • 234 Thanks
    adonis10
    Just checked my state pension and it said I'm currently looking at 158pw, however, if I pay NI contributions for 3 more years, than I can get the maximum 168pw. Does that mean my NI should go down after 3 years (I'll be about 52/53 years old then), as paying more won't increase my state pension?!
    Originally posted by LarryR
    Wishful thinking! Just think of it as normal taxation after that point.
    • adonis10
    • By adonis10 29th Nov 19, 10:39 AM
    • 1,691 Posts
    • 234 Thanks
    adonis10
    I think, worryingly, my number may be about £75-80k to live on. I will still have 9yrs left on my mortgage when I'm 60 (currently costing £1700pm, 2.14% fixed), and with private healthcare (5k for me and kids, 7k for wife), groceries (6k), gas/electricity/water (3k), home/car/dog insurance, holiday, Council/road tax/petrol, clothes/eating out, etc, it quickly (scarily) adds up.

    On the bright side, I just remembered I've got two other personal pensions lying dormant at the moment, one with 95k in it (looks like it is dropping 500pa in fees!) And second one with £25k. Should I look to transfer these into my current employer pension?
    Originally posted by LarryR

    Wow, £75-80k per annum? I think with numbers like that you should probably get face to face financial advice as that is an epic amount over, say, 25 years of retirement (£1.9-2m..), although I imagine that will taper down with age due to the mortgage dropping off, possibly fewer holidays the older you get etc.


    Nice to find £120k of old pensions down the back of the sofa, though
    • jimi_man
    • By jimi_man 29th Nov 19, 10:50 AM
    • 265 Posts
    • 350 Thanks
    jimi_man
    I think, worryingly, my number may be about £75-80k to live on. I will still have 9yrs left on my mortgage when I'm 60 (currently costing £1700pm, 2.14% fixed), and with private healthcare (5k for me and kids, 7k for wife), groceries (6k), gas/electricity/water (3k), home/car/dog insurance, holiday, Council/road tax/petrol, clothes/eating out, etc, it quickly (scarily) adds up.

    On the bright side, I just remembered I've got two other personal pensions lying dormant at the moment, one with 95k in it (looks like it is dropping 500pa in fees!) And second one with £25k. Should I look to transfer these into my current employer pension?
    Originally posted by LarryR
    Ok, so quite a lot more than the figures I put. Obviously those figures are relatively high, though I'm guessing you or both of you, earn a reasonable amount, which means that the amount going into your pension is pretty high too.

    It's fairly easy to plug it all into a retirement calculator online and to see how close/far you you are. I suppose the options in the event of any shortfall are broadly, to reduce the amount of spending, increase the amount of pension provision or work longer.

    As the poster above said, you are better than a lot of others at your age, though of course it's not really a competition and retirement provision is very much a personal thing. There are people on here with £12K of pension income a year who are apparently happy and can't understand what people spend their money on, and there are others for whom a comfortable retirement lifestyle is £50K+ a year.

    I can't tell you whether to amalgamate the pensions. Administrately it probably makes it easier, and if you are spending on fees with no apparent benefit, then certainly something would need to be done. However it may be better to speak to someone more qualified about that - maybe your own employers pension provider?
    • LarryR
    • By LarryR 29th Nov 19, 11:24 AM
    • 30 Posts
    • 3 Thanks
    LarryR
    Well it depends entirely on how much you want to live off in retirement. Also whether you have any other pensions, a partner with pensions, other savings etc. Quite a broad question!!!!

    You can do a state pension check and see how much you are due from that, which is around 67 but might be 68 for your age I think. So retiring at 60 is 7/8 years until you get that. If you wanted £25K a year then that's £200K required just for those 8 years. Thereafter with the state pension it would be less, especially if you have a partner also with the state pension.

    Conversely you might only need half that amount because you are happy with £12K a year. Once you clarify your 'number' then it becomes much easier.
    Originally posted by jimi_man
    Ok, so quite a lot more than the figures I put. Obviously those figures are relatively high, though I'm guessing you or both of you, earn a reasonable amount, which means that the amount going into your pension is pretty high too.

    It's fairly easy to plug it all into a retirement calculator online and to see how close/far you you are. I suppose the options in the event of any shortfall are broadly, to reduce the amount of spending, increase the amount of pension provision or work longer.

    As the poster above said, you are better than a lot of others at your age, though of course it's not really a competition and retirement provision is very much a personal thing. There are people on here with £12K of pension income a year who are apparently happy and can't understand what people spend their money on, and there are others for whom a comfortable retirement lifestyle is £50K+ a year.

    I can't tell you whether to amalgamate the pensions. Administrately it probably makes it easier, and if you are spending on fees with no apparent benefit, then certainly something would need to be done. However it may be better to speak to someone more qualified about that - maybe your own employers pension provider?
    Originally posted by jimi_man
    I just plugged my figures into a pension calculator (thanks for the suggestion) on the Money Advice Service and it said that at my current levels, I'm on target to get a pension income of £31k at age 60, going up to £35k when my state pension kicks in when I'm 67.

    They say on the website that most people aim for around 50% of their salary for retirement, for me this would be about £50k. It looks like I either aim to retire at 65, at my current rate, or increase my contributions significantly.

    Is the amount that is forecast for my retirement income inflation adjusted, do you know? In other words, when I'm 67 (in 18yrs time), will even £50k be sufficient?
    • jimi_man
    • By jimi_man 29th Nov 19, 12:02 PM
    • 265 Posts
    • 350 Thanks
    jimi_man
    I just plugged my figures into a pension calculator (thanks for the suggestion) on the Money Advice Service and it said that at my current levels, I'm on target to get a pension income of £31k at age 60, going up to £35k when my state pension kicks in when I'm 67.

    They say on the website that most people aim for around 50% of their salary for retirement, for me this would be about £50k. It looks like I either aim to retire at 65, at my current rate, or increase my contributions significantly.

    Is the amount that is forecast for my retirement income inflation adjusted, do you know? In other words, when I'm 67 (in 18yrs time), will even £50k be sufficient?
    Originally posted by LarryR
    I don't know if it includes inflation tbh? What does it say on the website?

    Just be a little wary of the 'one size fits all' approach, such as 50% of your income in retirement. It really depends what you want to do.

    However, if nothing else, it gets you thinking about things and how much you do actually need and therefore can plan better.
    • AlanP
    • By AlanP 29th Nov 19, 12:20 PM
    • 1,846 Posts
    • 1,527 Thanks
    AlanP
    I think, worryingly, my number may be about £75-80k to live on. I will still have 9yrs left on my mortgage when I'm 60 (currently costing £1700pm, 2.14% fixed), and with private healthcare (5k for me and kids, 7k for wife), groceries (6k), gas/electricity/water (3k), home/car/dog insurance, holiday, Council/road tax/petrol, clothes/eating out, etc, it quickly (scarily) adds up.

    On the bright side, I just remembered I've got two other personal pensions lying dormant at the moment, one with 95k in it (looks like it is dropping 500pa in fees!) And second one with £25k. Should I look to transfer these into my current employer pension?
    Originally posted by LarryR

    You need to start playing with Excel and do a cash flow to take you through your situation.

    The mortgage will disappear at 69 for example so theoretically you don't need as much per year from then on, kids will start to cost zero / less as they become independent and so on.

    What we have done is look at what we are spending now (with kids off our hands) and identify what is "essential" once retired (bills / groceries etc.) and what is down to choice (holidays at £10k a year or at £2k a year is a choice).

    That'll start to give you a better idea of your target.

    Then look at the guaranteed income side as it relates to the family unit and the dates at which they become availabe (e.g. Salaries for a few years and then State Pensions).

    Subtract Income from Expenditure and yiou can see where your shortfalls are and then develop a plan to cover the gap which will give you an indication of required pot size.

    Based on my experience that model will develop over time and become more reflective of reality as you look and think about things more.

    Subtracting Income from Expenditure shows
    • Kendall80
    • By Kendall80 29th Nov 19, 3:29 PM
    • 860 Posts
    • 574 Thanks
    Kendall80
    I am so jealous. Most of you guys have very generous employers. Mine only pays the minimum which is 3% and my contribution is 5%. I have LISA though where I put £100 a month. I just turned 30 last month, I only started contributing in my pension last year (just moved here in the UK last 2017), so im in just my 2nd year putting money for my retirement. I donít think I will be able to increase my contribution soon because we have to pay now mortgage if everything goes well with house purchase.
    Originally posted by katkatmachine

    Indeed many on here appear very fortunate. Good for them. My workplace amounts are more in line with yours (4%:6%) although I match the employer/employee combined amount with personal SIPP contributions. My wife has a public sector final salary pension so at least that part is taken care of.
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