What % do you pay?
Comments
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14% from me and 6% from employer. I aim to achieve 20% minimum and will increase when my student loan is paid off0
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I'd gotten to work after you posted so decided to respond tonight instead.I'm not sure the logic of you paying the minimum because your employer pays the minimum stacks up! What your employer pays is not in your gift (unless you change employers). What you put in is. The advantage of pension saving is the tax relief you get as you pay money in. As a start, find out how much your employer would allow you to pay in. The good news is you are thinking about the contribution question at an earlyish age. Finger in the air, you need to be putting 15% - 18% into your pension each month, between you and your employer. Your future self will thank you. Good luck.
I'm wondering if you only skim read my post and missed out the bit where i said i also pay in to a SIPP (usually approx 2.5 times what goes in to my workplace pension btw)?
I know that the tax relief on the way in is an advantage but after a recent thread i made here it seems a L-ISA is more suitable for me rather than a pension.
"But higher rate.......". Yeah i hear that a lot. Unlike some though (seemingly most people here), i'm just a mere mortal & not a higher rate tax payer, not even close.
My employer will let me pay in whatever i can up to the maximum that i can ... it wont change what they put in one bit.
I don't put above the minimum in because 1) they wont match it and 2) the pension pot is no doubt invested very conservatively (probably they don't want to get bad press off this government push) and since i was early 30s when it started, mid 30s now, i don't think very conservatively suits my situation.
So what i would've paid in above and beyond .... currently goes in to the SIPP.
So while i'm not paying in extra, i actually am.0 -
I agree with your entire post. The bit about getting used to spending is very true. That's why when i get any pay rise, i always bump my contributions to something i'm saving for (emergency fund, retirement for e.g.).Anonymous101 wrote: »I agree in a sense. I think that most on here probably earn more than average and possibly came looking on here as a way to learn where to put any excess. I also think that there's plenty who naturally enjoy a lower cost lifestyle which enables them to save more. Then there's the ones that are nearing retirement and maybe have a bit spare after kids have flown the nest. Basically lots of circumstances.
The bit i quoted too - yes, we will have many different circumstances on here, even people on low wages as there will be no one-size-fits-all statement that applies across the board.
Still with that said, i think the majority will be people who either earn cash or have cash and have an interest in cash. By that i mean what i would refer to as a 'nice amount'.
I only really know people who either struggle to get by or manage their money a little better and take a while saving to afford something. I don't know these people who earn or have the kind of money that seems to be getting mentioned here so while it interests me as i wonder how life is for different people in different situations, it's not really something i can relate to.
To not totally waffle on, i do wonder when people calculate what goes in to their pension when they're talking about it, do they include their employers contribution or only their own?
Me personally i only focus on what i do myself. My own contributions. I don't rely on there being a state pension at retirement, i rely on myself. So when i'm talking about my contributions i'd actually say i put in 5%, whereas it's a combined 8% that goes in.0 -
Reading this thread I wonder how so many can afford to put away such high percentages each month. I know I couldn’t afford that out of my pay.
This a retirement site. Most are older than you. Also, most are human. And humans like to brag. Really wouldn’t try to assume what people post here is in any way representative.
When I was in my 30s, I focused on career and family. The pay jumped around age 35 but was moderate up to that point. Started quite low when I was 25. There was a monthly pension contribution, same as for everyone else in my company. The DC funds I had were mirroring the world cap and looked at once a year at most. Worked out fine.
Prioritising retirement planning and putting all the money into pension usually starts in late 40s or 50s, when the kids are standing on their own two feet. Certainly wouldn’t stress that crazies like me put such a high proportion into investments.0 -
You are probably better working backwards from a target pot. Start with this Which article “How much do I need to save into a pension at different ages?”
Then use a combination of pension and ISA contributions to achieve the target savings rate in a tax efficient manner.
For me 10% in my 20s, 15% in my 30s and 40s. Have recently upped it above 20% now I’m in my fifties and aiming for early flexi retirement at 55.
One useful thing I came across recently was the “millionaire next door” formula were you use your “net worth” to estimate if you are accumulating assets at a reasonable rate. It will give you a figure based on your age and income. Much more useful than just looking at your pension pot in isolation.AnxiousTheElephant wrote: »Just wondering what % everyone pays into their work pension?
My employer sets us up at 5% but I'm debating increasing this..0 -
I'm another one who doesn't earn enough to pay higher rate tax, and probably never will. I just concentrate on my situation and my targets as what others earn and do is interesting but not really relevant.
A quick question, do people use net or gross contributions when stating how much they put into pensions?0 -
Interesting thread which makes me wonder how i compare to others here in terms of pension pot built to date. I posted a similar topic a while ago but always interesting to get other views as I am a late starter and feel my pension provision is so, so low compared to where it needs to be.
Current status and valuations
Age - 36
Workplace pension £42k
LISA £10k
£37k cash (don’t really count this for retirement as will no doubt be eaten into for house bills, renovations, usual life costs)
Salary - low-average bracket of £34k
I’m currently upping my contribution as much as I can as am playing catch up due to a late start in the pension game. Fairly low mortgage means I’m able to put 18% away and hope to increase this to 25% over the next year.0 -
One always feels that one's pension provision is too low! I have to admit that you are actually doing better than you might expect.
The median private pension wealth for all people aged 35 to 44 is £12,400 few years ago. If you just include the people who do have private pension wealth then it goes up to £40,100.
In my case, I am 33 on £28k salary with £70k in my personal pension and £7k in my workplace pension. Outside that though, I don't really have much cash or investment overall.
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I'm another one who doesn't earn enough to pay higher rate tax, and probably never will. I just concentrate on my situation and my targets as what others earn and do is interesting but not really relevant.
A quick question, do people use net or gross contributions when stating how much they put into pensions?
I used gross % as my scheme is sal sac, as such it is deducted from gross0 -
From gross pay I do 8.5% main scheme contributions and 3% to AVCs.
I also invest a further 54% of my net pay to S&S ISA/LISA/SIPP0
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