Pension percentage you should put in

[colin86]

Morning guys

Been thinking about pensions recently and wonder if there a general thumb rule percentage you should aim to put in ?

I am currently 38 paid into mind for 13 years and combined going into it is 9% .

I am a 20% tax payer .

Thanks

[welshjon81]

As much as you possibly can! I'm 43 and I put monthly monies away into a short term savings with around 4.5% interest, long term investment savings (hopefully 7% or 8%) and then into my pension. I have a standard work based pension and also a private pension. So four saving avenues I suppose.

The trouble is, we were never taught things like this at school, so its all just guess work! At least I can work out simultaneous equations though. pfft!

[Cats_pyjamas]

What you can sensibly afford. There is a weigh up between building a pot and having cash(flow) and savings day to day. It also depends when you want to retire and what lifestyle you wish/require.

Personally we are fairly frugal, but want to retire at a reasonable age.

I put in 18% (plus 8% from my employer), but it is largely covered by my shift and overtime accurals, it also goes some way to reduce tax liability as a 40% tax payer on some of my earnings. If that were to change then I can always back it off. Make hay while the sun shines, as they say.

Edited by Cats_pyjamas on Monday 3rd February 17:54

[Muzzer79]

The only sensible answer is as much as you can afford.

If you 'over-contribute' - great, you get an earlier or better retirement.

If you 'under-contribute' - well, you're contributing as much as you can so there's not much you can do about that.

[Sunday Drive]

36% inclusive of ER

[richard-8zwx3]

One "general rule" is dependent on when you start saving for a pension, take your age, divide by 2 then put that percentage of your gross salary into pension.So start at 40, put 20% in.

As much as you can, after you have repaid your high debt and built up your emergency fund, is a better rule though!

[Cotty]

Look to see if your company offers salary sacrifice to help build the pension pot.

[Ecosseven]

Muzzer79 said:

The only sensible answer is as much as you can afford.

If you 'over-contribute' - great, you get an earlier or better retirement.

If you 'under-contribute' - well, you're contributing as much as you can so there's not much you can do about that.

Agreed. Life is a balance - you want to enjoy the journey but contributing even an extra £50 / month now can make a decent difference in 25 years time thanks to compound interest. Pension contributions really make a difference at higher tax rates, especially if you have a salary sacrifice scheme. I live in Scotland where the 42% income tax rate kicks in at £43,663.

[mike9009]

Afternoon,

Just to answer the OPs question I put in about 13% (then my employer adds another 5%, I think).

Like others have said - it is really dependent upon what you can afford and your priorities of living a life now too. However as you start getting closer to retirement, you will wish you made a slightly different call when you were 20 years old....

[FreeLitres]

I'm mid 40's and paying 35% in to my workplace pension with the company adding another 4%. (I'm not far into the 40% tax bracket so not a huge earner)

Now that they have increased the earning threshold for child benefit clawback, I'm tempted to reduce my contribution to 30% and to invest the extra into my S&S ISA.

If anyone is in their 40s and still paying the minimum into their pension, log in to your providers website and have a look what the projections are looking like. Most people pay in way too little.

While you are on your pension website, have a look at the default fund they have put you in. It will be a very "safe", very low growth fund. If you still have 10+ years to retirement, do ourself a favour and move to a higher growth fund.

-I am not a financial adviser. This is just my thoughts and not financial advice.