What % do you put into your pension?

[matt21]

For years I’ve paid 6% into my DC pension and my employer 10% and put some money into savings. As a 40% tax payer, I feel I’m missing a trick and should put a lot more into my pension.

Assuming I can afford it, is there any downside to increasing my contribution to 15%, total 25% including employer contribution? I am unlikely to need the cash I would not put into savings.

What % do you put in your pension?

[anonymous-user]

The cap for tax relief is 40k/year, so that’s what goes into mine. I am on a DB scheme though.

It’s free money so put in as much as you can afford.

Edited by anonymous-user on Wednesday 27th July 21:27

[phope]

Starting a new role next week - I've asked the new employer to set my contribution at 8% and theirs will be 12% (sliding scale, capped at 12) - it won't prevent me from lumping in bonuses at a later stage to the pensions to reduce tax bill either.

I'm 48, so take the point of view that mine are only 'locked in' for another 9 years until age 57 if I need to access pensions from then on.

[Benjy911]

25% here. I don't need the cash so I think it's the best place for it, with any spare going into my stocks and shares ISA.

I expect they'll change the rules at some point so I'm making the most of it. The only bit that concerns me slightly is when I'll be able to access it, as based on current limits I'm nearly 30 years away!

Edited by Benjy911 on Wednesday 27th July 21:55

[gotoPzero]

IMHO.

Dont look at %'s.

Look at what age you want to retire (years left to contribute) and what sort of income you might want (what pot you might need) and then work it back from there.

E.g.

Retire at 60, currently 40 with a pot of 200k.
Est desired income in retirement of £40k.
Pot required £1M ish.

Leaves 800k "to find".

Assume 4% return. Input of £1700 / mo (from what ever streams you have i.e EC, sal sac etc) then you should arrive at c.1000k in 20 years.

IYSWIM.

Its a bit more complicated than that as you have SP plus inflation etc etc but its certainly where I would be starting. You might want TFLS or you might not.

IANAFA

[Rick101]

Around 11% here. 42 now. Aiming to be done by 60.

Seems a chunk compared to most of my colleagues but not much compared to some on here.

As ever, there has to be a balance.

Edited by Rick101 on Wednesday 27th July 21:45

[Jiebo]

About 15% of gross salary including employer contributions.

I'm over 20 years from being able to access it, so don't want to go overboard. I'd rather have cash now to spend and invest now, but I should still be able to pull together £500k (todays value) for me alone excluding partners by retirement to give a perpetual pension a go. This alongside rental income should be plenty, so shouldn't need to rely on the state pension and fully expect it to be means tested by then.

It will be nothing compared to the multi million pensions so many boomers have had over the years with average jobs, without them even knowing how big their pot would need to be equivalently today.

[ReallyReallyGood]

I don’t understand why everyone wants to be so rich in their 70s.

[s111dpc]

I’m fortunate enough to be in a non-contributory DB scheme but I pay in 7.5% into the scheme AVC in the hope of retiring early.

[okgo]

anonymous said:

[redacted]

You can opt out?

[V8covin]

ReallyReallyGood said:

I don’t understand why everyone wants to be so rich in their 70s.

The plan should be to spend every penny of your pension pot by the day you die ..... except we don't know when that is usually

[langy]

I contribute 20%, company puts in 8%. Want too increase my contributions, but approaching the annual £40k limit, so limited options.

[Jawls]

ReallyReallyGood said:

I don’t understand why everyone wants to be so rich in their 70s.

I want to be able to stop working early 50s, essentially.

Including the minimum employer contribution, I stick approx 23% into pension.

[anonymous-user]

ReallyReallyGood said:

I don’t understand why everyone wants to be so rich in their 70s.

I’m 51 now and plan to be retired by 62 which, looking at my colleagues who are doing the same, sounds about right. Too old to be bothered with working but young enough to still enjoy life, hopefully for another 20 years or so. Wife will also be able to retire when I do, but she’ll be 60.

[covmutley]

3% here, and cant reallly afford more at the moment.
3 kids, relatively big mortgage.

Don't eat out often, can't afford a holiday, but givt take basically half of a small proportion of my wage. Then tax everything I spend on top. I'm definitely starting to feel cost of living rise, and I'm absolutely one of the lucky ones.

Intend to contribute more when I earn more and kids leave home

[mike74]

ReallyReallyGood said:

I don’t understand why everyone wants to be so rich in their 70s.

I agree.

Based on my family history I'm taking quite a gamble on being alive and fit and healthy enough to actually make use of and enjoy a reasonable income in my 70's.

Having said that I have been paying 8% + 8% employer contribution for almost 30 years.

[Jamescrs]

Around 14% gross currently and my employer is somewhat similar. I'm aiming to retire at around 55 (I'm 41 now) Should be mortgage free more or less by then so doable and i'll probably work part time in something else i'm interested in for pocket money and a reason to get moving on a morning simply because I don't think it's healthy to just stop and do nothing.

[anonymous-user]

mike74 said:

ReallyReallyGood said:

I don’t understand why everyone wants to be so rich in their 70s.

I agree.

That’s because everyone on PH retires by 40 so we can spend more time in the gym. I made my first “mil” by 15, selling cream eggs in the playground at lunchtime. By 20 I had a garage full of leased super cars and an arm full of luxury watches. Of course I live in London because all the best people do and I own several very successful BTL businesses.

If you don’t believe my wealth, I can download some pictures I found on the internet. Just need to ask my mum if I can use the family computer.

[danny0001uk1]

Mad how people can afford 40k a year into there pension mid 20s early 30s I'm late 30s and 40k a year is 15k more than my annual salary

[Dave350]

I pay the minimum amount to get the maximum employer contribution. So I pay 6% and they pay 8%. Id rather the rest be put into S&S ISA's which can be used for life if need be between now (32y/o) and retirement, then ploughing it all into retirement funds.

My new job has the bonus take me over £100k taxable income so come bonus time will end up putting c.£10k-£15k per annum to avoid the 60% effective taxing on those earnings, and also losing out on the tax free childcare / 30 free hours childcare.