Pension projected fund prediction lower than I’ve paid in

[ImbarbaraB]

It just seems like there’s no point to it?

I earn so little that my contributions are totally £4000 and my predicted fund at retirement is £3700

Should I just opt out and save in a way that I can control it?

Depending on your age do you have a LISA? That gives you a 25% bump up on anything contributed and you can take out age 60 without penalty

Definitely call them and ask. If it is 50/year it's worth trying to increase that amount massively. How much do you pay in per month from your salary?

That’s not great at all. However I’d say you need to be adding extra money into your pension rather than stopping it. You really need to boost it up as much as you can before retirement.

Do you have pensions with other companies?
How much do you contribute and does your employer make a contribution?
For example I put in 8% and my employer puts in 16%.
Can you increase your payments?
Since you are 35 I'd be Inclined to set the risk level to medium-high if it's currently in a lower risk setting.

Can you increase your contributions?

If you’ve only been paying in an average of £400 a year for the last ten years then it would be unreasonable to expect that figure to provide for your entire retirement.

I’m a year younger OP, and mine and my employers pension contributions add up to about £10k a year into my pot each year. But I sacrifice 9.3% of my pre tax salary for contributions and then my employer contributes 14.38%. So there’s just under 24% of my pre tax pay going into my pot every month.

@FrownedUpon

That’s not great at all. However I’d say you need to be adding extra money into your pension rather than stopping it. You really need to boost it up as much as you can before retirement.

Wish I could afford to

Maybe one day il be earning more and less childcare and I can hit it hard to catch up

It seems like a long stretch though

@Horehound

Do you have pensions with other companies? How much do you contribute and does your employer make a contribution? For example I put in 8% and my employer puts in 16%. Can you increase your payments? Since you are 35 I'd be Inclined to set the risk level to medium-high if it's currently in a lower risk setting.

My company just do the minimum they are required to do so 3%

OP, if employable and able to and depending on your caring responsibilities, you have c30-40 years more employment contributions and investment growth though without contributions, growth won't be a panacea. Perhaps this is more a signal to try and prioritise pension saving and ensure you will have a full NI record if in the UK for state pension purposes rather than withdrawing your £4k (if you could).

Good luck.

Can you see the bit where is outlines the assumptions? And post that?

I wonder if the fund value is in real terms which might explain it.

@QueenOfPain

Can you increase your contributions?

If you’ve only been paying in an average of £400 a year for the last ten years then it would be unreasonable to expect that figure to provide for your entire retirement.

I’m a year younger OP, and mine and my employers pension contributions add up to about £10k a year into my pot each year. But I sacrifice 9.3% of my pre tax salary for contributions and then my employer contributes 14.38%. So there’s just under 24% of my pre tax pay going into my pot every month.

Wow that’s excellent You’ll be having an amazing time in retirement

@Herhereherhere

Can you see the bit where is outlines the assumptions? And post that?

I wonder if the fund value is in real terms which might explain it.

I think it is in real terms. I have just looked at their website and they have this answer to a question on how they calculate it thepeoplespension.co.uk/help/knowledgebase/what-affects-the-amount-of-my-projected-pension-pot-at-retirement/

OP I would really recommend posting on the MSE pensions board forums.moneysavingexpert.com/categories/pensions-annuities-retirement-planning as they have some really knowledgeable people and it's likely that someone will be familiar with this scheme.

Once you've understood what your current position is then you can work out what you can do for the future.

@QueenOfPain jeez we are eerily similar. I'm also 34 and we have same pension contribution % :) going to try and stay with this company as long as possible!!

@ImbarbaraB when you aren't needing to fork out for childcare then do try and plough as much money as you can Into it.
When you retire you can take out 25% of the full pension pot tax free. You can only do this once though!
Do you get pay rises or bonuses? Sometimes changing jobs can increase your salary, have you any scope to do that?

I’m really shocked at pp above saying their employer puts in 14 or 16%. Wow. Mine puts in 6% and that’s regarded as generous.

Op, don't be too dispirited, your still Extremely young and probably at the age or younger when people start to think about pensions. That figure will grow.

I would also when you get 100 spare, open up a vanguard self invested personal pension, sipp, they are a which awarded platform, very very low fees and good funds to invest in.

If you leave this job, take that pension out and transfer it into the vanguard sipp
, easy range of funds that invest in everything, I'm sure the return wouid better than what you currently have.

OP, do you have an transferable skills that would mean you could work for an organisation that is known to have a good pension scheme?

NHS or Local Authority?

@daisypond It’s the NHS.

It’s probably a combination of high fees, low risk fund & small contributions.

The government scheme gives free pension advice, I think.

Do you have prospects of higher earnings and/or scope to increase your contributions?

@TreeDice

That's £3700 every year for the rest of your life though? How long have you been paying in?

No it isn't. It's the value of the pension fund, £3700 which an actuary will work out as being worth tuppence ha'penny per year for the remainder of the OPs life after retirement,

OP you need to get some proper expert financial advice so you can explore your options with all the facts and figures in front of you. You shouldn't do anything with the pension scheme, leave it where it is, as it will be worth a lot less than £3,700 if you cash it in - at least talk to a finance person about it first.

@QueenOfPain

Can you increase your contributions?

If you’ve only been paying in an average of £400 a year for the last ten years then it would be unreasonable to expect that figure to provide for your entire retirement.

I’m a year younger OP, and mine and my employers pension contributions add up to about £10k a year into my pot each year. But I sacrifice 9.3% of my pre tax salary for contributions and then my employer contributes 14.38%. So there’s just under 24% of my pre tax pay going into my pot every month.

I bet you've been busting a gut to tell the OP that.

#RubItIn

Looks like the people’s pension which is the same as me. For the figure to go down you would have to 1) stop paying or pay something silly like £20 a year and 2) the return from the investments would have to be less than their 0.5% annual management fee.

Some dodgy maths is happening there, best give them a ring.

God that’s depressing. Think my pension is about £6k. Amazed at all these companies who put in so much.

Seems very low, what funds is it invested in? With so long until retirement you're best off in a low cost global equity fund

Something to think about.

I've heard of people joining the NHS maybe for about 10-15 years before retirement.
They have something called a career average pension.
So currently for each year you work. You are building up 1/54 of your salary.

So a salary of 15,000. Means after a year you've built up a pension of 277.77 every year.

Even working that same job on a salary of 15,000. Means after 10 years you will have built up a pension of 2777.77 a year. There is a lot of other benefits. And they also increase the amount you've build up by a small amount every year.