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?

I've a pension like this, worth less than I've paid in. I don't want to brag, but think I'll get £58 a year !!! I can't wait .. I will have just about paid off the massive mortgage by my retirement age of 68 and so I suppose I'll have to sell it and nowhere to live .. something to look forward to !

But if you've only put 4k in, so what do you expect? If you're 35 your pension has 30 more years to grow! Keep on paying in - it's the most tax-efficient thing to do. The fees on workplace pensions are pretty low.

@daisychain01

No hun, more just explaining that if you don’t pay it in, it isn’t gonna be there when you need it. It isn’t gonna magic out of nowhere.

I’d love to spend the extra £300 a month on doing nice stuff now, but I’ll be poor when I’m old if I take that option.

I also suggested to OP that she could look for a job in the same organisation which is the largest employer in the UK, so there is likely to be something she could do, and then she can join the same pension scheme and get the same benefit, the employer contribution is the same regardless of earnings. Employee contributions are different percentages based on what your salary.

Does it say the valuation assumptions (return rate in excess of fees)? Unless it's 100% in cash and fees are slowly eating it, it doesn't make much sense.

[quote QueenOfPain]@daisychain01

No hun, more just explaining that if you don’t pay it in, it isn’t gonna be there when you need it. It isn’t gonna magic out of nowhere.

I’d love to spend the extra £300 a month on doing nice stuff now, but I’ll be poor when I’m old if I take that option.

I also suggested to OP that she could look for a job in the same organisation which is the largest employer in the UK, so there is likely to be something she could do, and then she can join the same pension scheme and get the same benefit, the employer contribution is the same regardless of earnings. Employee contributions are different percentages based on what your salary.[/quote]
No, you just want to brag. I find post like yours particularly distasteful.

Hello I agree.

Op do research, take the control now, at least arms yourself with some knowledge.

Research vanguard, Jack bogle and then read some fire stuff.

Financial independence, retire Early.

It's not something I will be able to achieve however it helps one with tips, aim high!

OP remember that when you say you've put £4K in, in reality some of that has come from your employer and also (presumably) tax relief and investment increases. So it's probably still a much better deal for you than simply stopping paying in and putting money in savings.

If I were you I'd try to get a really good understanding of the scheme and what happens if you change contributions etc. I'd then get a state pension forecast so you can get a good picture of where you are. Once you've got that you can work out what you need to do next. You've got 30 years so still plenty of time, but decisions you make now can have a really important impact on your future. I started taking pensions much more seriously and did all this a few years ago and feel much more in control as a result.

It doesn’t make any sense that they would expect it to lose so much value so I would definitely look at the assumptions and maybe changing the investment strategy to something more in line with your needs if required. You could also look for a financial advisor to talk to. I do salary sacrifice to reduce the amount that of student loan I re-pay (so win-win), can you afford to put in a little bit more? I’m currently pre-children, so trying to put in more while I can (appreciate you can’t go back in time!) but you can be flexible in your additional contributions, put in more when you’re feeling a bit more flush and vice versa and every little helps compound it.
Also, have you looked at the impact of your maternity leaves on your NI contribution record? It might make financial sense to try to boost your state pension that way.

Thank you to everyone
A really helpful varied selection of responses

I will look into vanguard
I will be increasing contributions soon and hopefully that will make a difference

It all seems such a waste but I guess when I’m old il be glad of the sensible me that decided to save

I am ok with my government pension at least

I’d love a job that pays such high co tribute one from the employer but if that means working for the NHS I’m not too sure I would do that

Worth thinking about though

@QueenOfPain what is your job out of interest?

@daisypond

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.

I know! Mine is 7%, who are these magical employers? 😂

@MistySkiesAfterRain mine pays in 17 % or thereabouts I think (local govt).

@QueenOfPain your post was incredibly tone deaf.

Op keep plugging away, it might seem like nothing but it is a start. I don't know the answer to why the fund has shrunk a bit but hopefully someone will!

That doesn’t make sense , like others have said I would ring them and see what is going on. I had a small pension from my first job of around £4000 and it has gone up quite a lot since I stopped paying in 10 years ago. If you’re 35 there’s loads of time before retirement so I would imagine it should definitely be worth more than it is now.

I suspect that the predicted figure shown assumes that you pay no further contributions into the fund at all, and that is what it would be worth at retirement if you don't pay any more in.

I also suspect that they are being extremely cautious and prudent with their estimate, which is all it is. They are trying to predict what it might be worth in the future, and they are erring on the side of caution.

@MistySkiesAfterRain I work for a government agency who puts in 8% and it rises with age

Op remember that you don’t pay tax on pension contributions so if half of that is from your payslip you’ve so far put in £2k and gained £600 (20% tax + 12% NI) so you’ve still got more than you would if you’d just saved it.