How much do you think you’ll need to save up to retire on?

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  • Money_Advice_Service
    Money_Advice_Service Posts: 27 Organisation Representative
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    50-60% of your current income is usually considered a good benchmark to aim for. This assumes you have paid off your mortgage and the majority of any outstanding debts though. (MAS Andrew - DipPFS)
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  • lisyloo
    lisyloo Posts: 29,609 Forumite
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    bugslet wrote: »
    He's an expert in investments


    Good idea, but that's not investing, that's understanding the tax regime which hopefully he knows about too.
  • Money_Advice_Service
    Money_Advice_Service Posts: 27 Organisation Representative
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    When you consider the average pension pot in the UK is around 30,000 your doing very well with regards saving towards your retirement subject to your income expectations.

    Quick warning though. Accessing your pension before 55 will usually be treated as an unauthorised payment by HRMC and could be subject to a 55% tax charge.

    (MAS-Andrew DipPFS)
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  • Paul_Herring
    Paul_Herring Posts: 7,481 Forumite
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    50-60% of your current income is usually considered a good benchmark to aim for.

    (Note that the post I've quoted doesn't actually appear to be in reply to anything said so far...)

    That's about as, if not actually less, useful than "half your age as a percentage of your salary when you start saving."

    Is there an actual point to this thread, or is someone bored at the Money Advice Service?
    Conjugating the verb 'to be":
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  • Money_Advice_Service
    Money_Advice_Service Posts: 27 Organisation Representative
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    Money held both in an iSA and a Pension is tax free. The key difference is that with a pension you qualify for tax relief on money going in but money going out (or at least some of it) is taxed as income. While contributions going into an ISA has already effectively been taxed and is untaxed when leaving the ISA.

    (MAS-Andrew DipPFS) #talkmoney
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  • GunJack
    GunJack Posts: 11,673 Forumite
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    bugslet wrote: »
    s as I wind my business up and reach the point at which i could potentially take 25% of the pension

    Couldn't you sell the business on as a going concern and make a few extra quid from it??
    ......Gettin' There, Wherever There is......

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  • JoeCrystal
    JoeCrystal Posts: 3,011 Forumite
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    edited 9 November 2018 at 5:47PM
    Money_Advice_Service wrote: »
    How close are you to that goal? Do you wish you started earlier?

    I started when I was 24 years old back in 2010. I wished that I started back in 2008 when the stock market was even lower and when I started working for my employer. Unfortunately, my employer doesn't contribute anything back then so didn't bother with the pension.

    At the age of 32, I still got a long way to go. My goal is to retire at whenever the earliest I can access my pension pot (at 66% of my current salary) so, the idea that Treasury is mentioning that it is going to be ten years before SPA, it is 58, so got 26 years down the line to go. According to HL calculator, I would need to invest and hope for an excellent return to get a pension pot of £820k to get an index-linked annuity of £18,500 (rising at 3%). As someone with the 65k pension pot, that is a goal that seems impossible to meet, especially someone who wants to get a guaranteed annuity when retiring.
  • lisyloo
    lisyloo Posts: 29,609 Forumite
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    especially someone who wants to get a guaranteed annuity when retiring


    This is an expensive option when you are young (I mean 58).
    Why not drawdown and then if you're keen on a guaranateed income get an annuity when you're much older?


    Either way it's a massive decision so you need professional advice at the time.
    Ages and the tax regime may be very different then.
    We may even have an antibiotics apocalypse !
    I don't think you can plan in too much detail at your age, but it's good that you recognise now that you need to put a LOT in if you want a 30 year retirement. Many don't seem to realise that or prioritise it.
  • Albermarle
    Albermarle Posts: 22,042 Forumite
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    50-60% of your current income is usually considered a good benchmark to aim for. This assumes you have paid off your mortgage and the majority of any outstanding debts though. (MAS Andrew - DipPFS)
    This figure only applies if you have a good income when working , with some spare money every month to go into savings, pensions etc
    If you have a low paid job and struggling to make ends meet , then you need close to 100% of earnings in retirement otherwise you will not cope.
  • westv
    westv Posts: 6,081 Forumite
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    Money_Advice_Service wrote: »
    When you consider the average pension pot in the UK is around 30,000 your doing very well with regards saving towards your retirement subject to your income expectations.

    Quick warning though. Accessing your pension before 55 will usually be treated as an unauthorised payment by HRMC and could be subject to a 55% tax charge.

    (MAS-Andrew DipPFS)

    This £30k average, does it allow for the fact that some/many will have more than one pot?
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