how much should I put in my pension?

how much should I put in my pension?

Author
Discussion

TwigtheWonderkid

43,248 posts

149 months

Tuesday 2nd June 2015
quotequote all
Craikeybaby said:
aclivity said:
Looking at money saving expert it says you half your age and put that amount in - so the example given is someone at age 32 puts in 16% of their salary. I'm 46 now, but I have been paying into various pension schemes since I was 21 years old, although I am not sure of how much I have put away!
It says 1/2 of your age when you started your pension, including employer contributions. I'd never heard of that before, so I think I need to up my contibutions slightly. Thanks for posting the link.
Yes, it's half your age when you start, and pay that same amount thru your working life. So if the OP started at 21, he should be ok ish if he's paid 10/11% since then. I started at 29 so have paid 15% consistently since then, for the last 23 years. Time will tell if it's enough, if I'm fortunate enough to live to see it.

Craikeybaby

10,369 posts

224 months

Wednesday 3rd June 2015
quotequote all
I think I've been under paying for the last 4 years, as I started at 27 and was paying 4% for 2 years, then 5% for 2 years in addition to 8% from my employer. Will up it next time we are allowed to.

Edited by Craikeybaby on Thursday 4th June 12:03

keo

2,022 posts

169 months

Wednesday 3rd June 2015
quotequote all
Ginge R said:
Here you go.

Keo. Drink of champions.

https://www.gov.uk/find-lost-pension
Thanks!!

Only had a couple of Keo's before, my mate got them for me. Is it Greek/ Cyprus larger?

Googie

1,072 posts

125 months

Wednesday 3rd June 2015
quotequote all
keo said:
Ginge R said:
Here you go.

Keo. Drink of champions.

https://www.gov.uk/find-lost-pension
Thanks!!

Only had a couple of Keo's before, my mate got them for me. Is it Greek/ Cyprus larger?
Always taste better in Cyprus but can be bought in most Tescos !

northandy

3,495 posts

220 months

Wednesday 3rd June 2015
quotequote all
My company does a max of 10% contribution if you put 5% in, I put 11% in so 21% in total. I also put a few k from bonus when that comes round.

I'm 41 so aim to keep upping my contribution by 1or2% each year from now on.

I have wondered if it woul be worth having a rental property too, just to mix things up a bit.

Craikeybaby

10,369 posts

224 months

Thursday 4th June 2015
quotequote all
Craikeybaby said:
I think I've been under paying for the last 4 years, as I started at 27 and was paying 4% for 2 years, then 5% for 2 years in addition to 8% from my employer. Will up it next time we are allowed to.
The "what if" calculator on my pension provider website doesn't seem to think that 14% a year from when I was 27 will get me that much at all, so not sure which guide I should follow.

Craikeybaby

10,369 posts

224 months

Tuesday 16th June 2015
quotequote all
Craikeybaby said:
Craikeybaby said:
I think I've been under paying for the last 4 years, as I started at 27 and was paying 4% for 2 years, then 5% for 2 years in addition to 8% from my employer. Will up it next time we are allowed to.
The "what if" calculator on my pension provider website doesn't seem to think that 14% a year from when I was 27 will get me that much at all, so not sure which guide I should follow.
Well out window to change our payments has opened and I've upped it to 6% + 8% from my employer (+ aparently a bit more as it is through salary sacrifice). Will see how that goes for the next few years.

CaptainSlow

13,179 posts

211 months

Tuesday 16th June 2015
quotequote all
Craikeybaby said:
The "what if" calculator on my pension provider website doesn't seem to think that 14% a year from when I was 27 will get me that much at all, so not sure which guide I should follow.
This is likely to be based on current annuity rates, which in turn are based on interest rates, these are subject to change and may look very different in 25 years!

Sheepshanks

32,535 posts

118 months

Tuesday 16th June 2015
quotequote all
It's surprising that not many in the private sector are putting in the 10% - 15% employee contributions that are taken off police, fire-fighters, teachers and NHS staff.

CaptainSlow

13,179 posts

211 months

Tuesday 16th June 2015
quotequote all
Sheepshanks said:
It's surprising that not many in the private sector are putting in the 10% - 15% employee contributions that are taken off police, fire-fighters, teachers and NHS staff.
Probably because they don't expect to start drawing their pensions after only 30 years of contributions and retire in their early 50's.

Nigel_O

2,859 posts

218 months

Wednesday 17th June 2015
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OP - if you tell me your age, target income, existing fund value(s) and existing contributions, I have a calculator that will (with some reasonable assumptions) tell you what you need to put away to hit your target


Craikeybaby

10,369 posts

224 months

Wednesday 17th June 2015
quotequote all
Nigel_O said:
OP - if you tell me your age, target income, existing fund value(s) and existing contributions, I have a calculator that will (with some reasonable assumptions) tell you what you need to put away to hit your target
I'm not the OP, but I'm the one who has been asking all the questions recently.

I'm 31, no idea of target income as it is so far away, fund value is £24270.57 and currently paying in £425 a month, including employer contribution.

Nigel_O

2,859 posts

218 months

Thursday 18th June 2015
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Craikeybaby said:
I'm 31, no idea of target income as it is so far away, fund value is £24270.57 and currently paying in £425 a month, including employer contribution.
In today's terms (ie number adjusted back to account for inflation), you're heading for a gross income of about £23k at age 68 (including around £6k State pension)

At age 60, you're looking at about £9.5k

If you let me know your target income in today's terms (ie as if you were retiring today), and a target age (or multiples) I can tell you how much more you need to contribute to hit your target

shakotan

10,679 posts

195 months

Craikeybaby

10,369 posts

224 months

Thursday 18th June 2015
quotequote all
Wow, that extra 8 years does make a load of difference!

I guess the ideal would be retiring at 60, with the £23,000 a year, so it would be interesting to know how much more I'd need to pay in to be able to achieve that.

bogie

16,344 posts

271 months

Thursday 18th June 2015
quotequote all
Craikeybaby said:
Wow, that extra 8 years does make a load of difference!

I guess the ideal would be retiring at 60, with the £23,000 a year, so it would be interesting to know how much more I'd need to pay in to be able to achieve that.
a lot

just play with the calculator in the post above.....

Its almost depressing the amount you really need to pay in to give you the income for retirement...especially if you didnt start in your twenties...I do think the online calculators err on the conservative side though, after all the over selling of the stock market gains 20-30 years ago

Nigel_O

2,859 posts

218 months

Thursday 18th June 2015
quotequote all
Craikeybaby said:
Wow, that extra 8 years does make a load of difference!

I guess the ideal would be retiring at 60, with the £23,000 a year, so it would be interesting to know how much more I'd need to pay in to be able to achieve that.
You're not going to like this.....

To retire at age 60 on £23k after tax (1,917pm), you will need to contribute an additional £914 per month

To retire at age 60 on £23k before tax (£1,710pm), you'll need another £743pm contributions on top of your existing £425pm

Not pleasant reading, is it?

At least you're already part-way there - there are millions of people heading for a pauper's existence on State pension only - they'll simply have to work until they drop

Craikeybaby

10,369 posts

224 months

Thursday 18th June 2015
quotequote all
Thanks. I figured that it would be along those lines. I just need to trade off extra money now vs early retirement.

I'll also have a look at the calculator posted above, we seem to have crossed posts.

98elise

26,376 posts

160 months

Friday 19th June 2015
quotequote all
Nigel_O said:
Craikeybaby said:
Wow, that extra 8 years does make a load of difference!

I guess the ideal would be retiring at 60, with the £23,000 a year, so it would be interesting to know how much more I'd need to pay in to be able to achieve that.
You're not going to like this.....

To retire at age 60 on £23k after tax (1,917pm), you will need to contribute an additional £914 per month

To retire at age 60 on £23k before tax (£1,710pm), you'll need another £743pm contributions on top of your existing £425pm

Not pleasant reading, is it?

At least you're already part-way there - there are millions of people heading for a pauper's existence on State pension only - they'll simply have to work until they drop
Unless things change, nobody lives on state pension alone IIRC. If thats all you have, then benefits kick in.

As to the OP, an good way of working out what you need to save is take the income you need, and multiply it by 20. That gives you the minimum pension pot you need.

GT03ROB

13,210 posts

220 months

Friday 19th June 2015
quotequote all
98elise said:
As to the OP, an good way of working out what you need to save is take the income you need, and multiply it by 20. That gives you the minimum pension pot you need.
Becomes quite a scary number really...