Pension Pot question
Discussion
Looking for some very general advice here
How large a pot do I need to earn £1k per annum pension from age of 65 ?
I'm asking that as then I can multiply it up to my required annual pension.
Thanks.
Edit I'm assuming its c£30k pot per £1k pa pension.
Would be very interested to know this as my back of fag packet calcs have left me thinking that excl my final salary and career ave salary that defined contribution pension with employer paying in 5% and say me paying in 6% the payback is pretty poor infact bloody poor (note I am doing it for now).
As such this may result in me looking at other possibilities as the prospect of having say a £50k pa pension maybe totally unviable yet with say 4 buy to let's all fully paid off they could yield that cash return in today's money. Plus classic cars wine etc.
How large a pot do I need to earn £1k per annum pension from age of 65 ?
I'm asking that as then I can multiply it up to my required annual pension.
Thanks.
Edit I'm assuming its c£30k pot per £1k pa pension.
Would be very interested to know this as my back of fag packet calcs have left me thinking that excl my final salary and career ave salary that defined contribution pension with employer paying in 5% and say me paying in 6% the payback is pretty poor infact bloody poor (note I am doing it for now).
As such this may result in me looking at other possibilities as the prospect of having say a £50k pa pension maybe totally unviable yet with say 4 buy to let's all fully paid off they could yield that cash return in today's money. Plus classic cars wine etc.
You didn't mention that you mean an annuity, but if you do, 5 seconds using google produces this amongst other results:
http://www.ft.com/personal-finance/annuity-table
Different rates for different annuities.
http://www.ft.com/personal-finance/annuity-table
Different rates for different annuities.
CaptainSlow said:
At the moment I guess £20k
Ok so lets say £20k = £1k pension pa. now in my scenario 11% total so 6%
Given a £20k pot that would mean I'd have to pay in £12k.
So just to get my money back would take 12 years - any age beyond 77 I'm "up"
My final salary pensions one takes just 2 years rounded to get my investment a couple of other 3 years
While career average takes just under 5 years
See the huge change... There is no way in my lifetime that my generation has an expected life which will have increased by 10 years ....really highlights that retirement funding is very difficult and really costs a fortune.
Welshbeef said:
Ok so lets say £20k = £1k pension pa.
now in my scenario 11% total so 6%
Given a £20k pot that would mean I'd have to pay in £12k.
So just to get my money back would take 12 years - any age beyond 77 I'm "up"
My final salary pensions one takes just 2 years rounded to get my investment a couple of other 3 years
While career average takes just under 5 years
See the huge change... There is no way in my lifetime that my generation has an expected life which will have increased by 10 years ....really highlights that retirement funding is very difficult and really costs a fortune.
True but annuities are very low at the moment, in better times that £20k maybe be £15k, so you pay in £8k or £4k after tax (if Higher-rate payer), so this makes the payback closer to 4 years.now in my scenario 11% total so 6%
Given a £20k pot that would mean I'd have to pay in £12k.
So just to get my money back would take 12 years - any age beyond 77 I'm "up"
My final salary pensions one takes just 2 years rounded to get my investment a couple of other 3 years
While career average takes just under 5 years
See the huge change... There is no way in my lifetime that my generation has an expected life which will have increased by 10 years ....really highlights that retirement funding is very difficult and really costs a fortune.
CaptainSlow said:
True but annuities are very low at the moment, in better times that £20k maybe be £15k, so you pay in £8k or £4k after tax (if Higher-rate payer), so this makes the payback closer to 4 years.
Thing is with Govt bonds at such low rates and likely to be possibly for the next decade or more due to the financial mess were all in Im struggling to see the upside. I suppose 2030's/2040's might be better but worryingly that's not too far off!!!
Welshbeef said:
CaptainSlow said:
True but annuities are very low at the moment, in better times that £20k maybe be £15k, so you pay in £8k or £4k after tax (if Higher-rate payer), so this makes the payback closer to 4 years.
Thing is with Govt bonds at such low rates and likely to be possibly for the next decade or more due to the financial mess were all in Im struggling to see the upside. I suppose 2030's/2040's might be better but worryingly that's not too far off!!!
fandango_c said:
Welshbeef said:
CaptainSlow said:
True but annuities are very low at the moment, in better times that £20k maybe be £15k, so you pay in £8k or £4k after tax (if Higher-rate payer), so this makes the payback closer to 4 years.
Thing is with Govt bonds at such low rates and likely to be possibly for the next decade or more due to the financial mess were all in Im struggling to see the upside. I suppose 2030's/2040's might be better but worryingly that's not too far off!!!
AdeTuono said:
Isn't the annual drawdown percentage of the pot limited to pretty much the same as the prevailing annuity rate though? Happy to be corrected if I've got this wrong; in fact, I hope I have.
Not sure.My point was that drawing down enables you to avoid annuity returns and to invest in other assets.
At those indicated annuity rates I think you have to give serious consideration to buying a rental property at say a 4% yield ?
Issue would be that you would have to pay tax if you took the lump sum but you would get to keep the capital unlike some annuities.
Or you could perhaps buy a commercial property in your pension ? Not sure if you can buy properties outright but you can buy commercial property assets. You can't buy residential property in any form in a pension.
Issue would be that you would have to pay tax if you took the lump sum but you would get to keep the capital unlike some annuities.
Or you could perhaps buy a commercial property in your pension ? Not sure if you can buy properties outright but you can buy commercial property assets. You can't buy residential property in any form in a pension.
Quite a few PH btl 'cognoscenti' consider IO the 'best' way to handle btl mortgages. What do the 'yields' look like as retirement fund providers after loan payments (on top of a myriad of other costs) are factored in?
Actually, come to that, how do lenders feel about lending to OAPs on btls these days?
Actually, come to that, how do lenders feel about lending to OAPs on btls these days?
groak said:
Quite a few PH btl 'cognoscenti' consider IO the 'best' way to handle btl mortgages. What do the 'yields' look like as retirement fund providers after loan payments (on top of a myriad of other costs) are factored in?
Actually, come to that, how do lenders feel about lending to OAPs on btls these days?
Dunno. I certainly wasn't advocating a mortgage.......Actually, come to that, how do lenders feel about lending to OAPs on btls these days?
Welshbeef said:
Thing is with Govt bonds at such low rates and likely to be possibly for the next decade or more due to the financial mess were all in Im struggling to see the upside.
I suppose 2030's/2040's might be better but worryingly that's not too far off!!!
At least you have some final salary and CARE pension schemes - they're worth their weight in gold at the moment.I suppose 2030's/2040's might be better but worryingly that's not too far off!!!
It used to be the case that you could get an annuity of around 15% when I was a bit younger but now it's more like 5%. Therefore to get the same amount of 'pension' from a personal pension you need a pot that's triple the size.
This has made final salary pensions and their cash transfer values much better than they previously would have been.
Many of our pension complaints are from people who have been advised to transfer out of final salary schemes into a risk based pension!
groak said:
Quite a few PH btl 'cognoscenti' consider IO the 'best' way to handle btl mortgages. What do the 'yields' look like as retirement fund providers after loan payments (on top of a myriad of other costs) are factored in?
Actually, come to that, how do lenders feel about lending to OAPs on btls these days?
If you have a big deposit they will lend to anyone. I recently bought a flat in block of 4 (whole block was reposessed). Actually, come to that, how do lenders feel about lending to OAPs on btls these days?
One of the other buyers was an 84 year old propertly developer. He's still getting mortgages.
Gassing Station | Finance | Top of Page | What's New | My Stuff