Calculating Pension Pot
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Hugh_Mungus
Posts: 17 Forumite
Hi all,
I had a question regarding pension calculators.
My workplace pension via salary sac(I had another thread and wasn't sure if it was Salary Sac, and it is) is giving me the calculation of: (based on a retirement age of 68/current age of 30)
Fund value at retirement: £461,029.53
Tax Free Cash: £115,257.38
Projected Annual: £9139.69
on a current salary of £24,720
This is based off the these contributions:
My contribution: £113.30 5.5%
Company: £113.30 5.5%
NI Supp: £15.64
total: £242.24 11.76%
at a net cost to me of £77.04
However I have popped my numbers into various calculators online and get a figure close to £140k with around £35k tax free.
I am booked into a slot for our monthly pension meeting at my work for next month to ask about those projections, but was wondering if there was anything obvious I had missed based off these huge differences.
Side note I have increased my percentage to 9.5%, to make 15%(my work max is 5.5% for my years of service which does not come into play until Nov)
Thanks
I had a question regarding pension calculators.
My workplace pension via salary sac(I had another thread and wasn't sure if it was Salary Sac, and it is) is giving me the calculation of: (based on a retirement age of 68/current age of 30)
Fund value at retirement: £461,029.53
Tax Free Cash: £115,257.38
Projected Annual: £9139.69
on a current salary of £24,720
This is based off the these contributions:
My contribution: £113.30 5.5%
Company: £113.30 5.5%
NI Supp: £15.64
total: £242.24 11.76%
at a net cost to me of £77.04
However I have popped my numbers into various calculators online and get a figure close to £140k with around £35k tax free.
I am booked into a slot for our monthly pension meeting at my work for next month to ask about those projections, but was wondering if there was anything obvious I had missed based off these huge differences.
Side note I have increased my percentage to 9.5%, to make 15%(my work max is 5.5% for my years of service which does not come into play until Nov)
Thanks
0
Comments
-
You're not accounting for compounding.
I assume you're doing is: current pot + (242*12*38) = £140k.
What the provider is doing is: current pot + (242*12*4.65%)*38 = £460k
AKA, adding 4.65% every year in compound interest that you will supposedly make from the underlying investments.
I guessed your current pot is £30k.0 -
Thanks, that looks a lot more appealing.
When I first got those figures from several calculators I was shocked at the difference.
I have increased my contributions, so those numbers will improve.
Thanks0
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