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Pension stuff

(2 Posts)
fatflaps Mon 18-Apr-16 10:54:57

I got some pension info in the post the other day and I'm hoping someone can reassure me that we are not going to be completely brassick when we retire.... DH is self employed and has nothing btw.

I'm 36 and my "current value" is £41k. It says:

Your final plan value could be £63,400 and this could give you a taxable pension each year of £1,440.

That seems scarily low - will I only £120ish per month???

Obviously I'll be making contributions but I'm a bit worried that my pension is ridiculously small and we're going to really struggle confused

Do I need to worry?

Wuffleflump Mon 18-Apr-16 12:27:12

Check what the assumptions are on the final plan value e.g. does it assume you keep on making contributions at the same rate? Does it only assume growth on what is there now? What rate of growth does it assume?

Do you think your income will rise towards retirement and therefore increase contributions, or are you planning to take a career break, or cut down hours / change job?

This will give you some idea of pot needed for a given income, but it has to assume future annuity rates, which are unknown. A quick look around suggests this calculator is on the generous side, but your provider seems excessively conservative.

That said, £64kish is not a large pot. That calculator gives a £200k pot for a £12k income.

I would have thought there would still be a state pension around by then as well, but who knows? Certainly don't assume it is enough to live on.

And you should not be bearing the financial burden of providing retirement income for two! DH can still benefit from the tax efficiency of pension saving without being employed. What if you two split up: how would be survive retirement then?

There's an article here about the various ways you can use your pension pot, but bear in mind this is aimed at people retiring imminently. No-one knows what the situation will be in 30 years time.

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