How much do you put in your work pension each month?

[Chloefairydust]

So here I was thinking I was being sensible paying £22 into my nest work pension every month, but after talking to my brother, I find out he’s putting £300 away each month into his (and your work has to double that so I think he’s making £600 a month in his pension! ) , and he seemed worried that I wasn’t putting enough away.

Im now panicking that I’m going to be really poor when I’m old😭…. For context I’m 30 years old and I think I have about £2000 in the pension pot. So how screwed am I?? 😱

Im on minimum wage so can’t afford £300, the most I could put away would probably be £100 at a push.

Is everyone else paying loads into their work pension pots too?

I pay around £200 and my employer pays around £475. I received a pension forecast recently and it really won't end up being that much when I come to get it as a pension. I am early 40's though. Unfortunately I can't imagine £22 a month will work out at very much at all.

My employer pays 8% and I match it with salary sacrifice, we don't have to contribute. Think it's £850 a month. Be aware (and check your policy!) if you're ever thinking of going on maternity leave then pension contributions for me were treated as non-salary and kept at the same level even if you're on smp/no pay.
I was lucky to have a final salary pension job in my 20s and it's harder to keep up those levels in a defined contribution scheme.

You need to get a copy of the scheme rules.
There may well be a % of earnings that the company will match.
So, say you put in 1%, the company might put in 1%
You put in 2%, they put 2%
You put in 3%, they put in 3%.
It's not aways an exact match. Sometimes it's twice etc.
But there will be a top amount they will match to. If you can get to this amount over time, you will be maximizing the amount of money you get from the company.

My % is fixed by the company. It's all or nothing for me. 7%. But I'm adding £200/month privately as well. I earn 18k.

www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/use-our-pension-calculator

I just had a quick play on this which will give you an idea of what you want / need

I'm 43 and was paying (pre tax) £2k plus my company's contribution but have recently reduced to £1k due to needing more cash. I only started paying in about 8 years ago. I wish to God I'd started earlier.

OP, this is unfortunately a concercing lack of financial literacy and will harm you if you don't address it. I would agree with the poster who said that you should act as if you have just started your pension now, and contribute accordingly if at all possible.

There are great money-related podcasts these days that you can use to learn more about how to improve your chances of having a decent retirement, these are some of the most accessible ones:

• The Money to the Masses Podcast
• The Meaningful Money Show
• This is Money Podcast

It's not just about the contribution level, although that is very important, but also knowing about and taking full advantage of the tax allowances (e.g. i've had higher rate tax payer partners in the past, who were not on salary sacrifice pension contributions, but who were not claiming back their additional tax relief - big mistake) , being careful about the platform and fund fees you're paying within your pension account (high fees erode gains), being sure not to just sit in the default fund, which is usually far too conservative and/or expensive, but instead to pick one that suits your goals, etc.

There is a lot to learn, but it's achievable and will be life-changing.

@Chloefairydust you don’t get taxed on your pension contributions.
So, if your salary a month is £1000 and you pay into pension £50/month, you get taxed on the £950, ok? Bare that in mind, it is a tax relief, that adds onto your £12500-ish tax free threshold. It’s a bit like they say: she hasn’t earned those £50/month, therefore we won’t tax it.

The employers have to put a percentage as well and add it into your pension pot. So, in my case, I pay 9% and my employer matches it, making it 18% of my monthly salary. Ask work, every employer seems to do a different percentage.

All this is on top of the state pension, which is standard and you get it for each year you were in employment or were in receipt of child tax credit. So who gets those £80/month is entitled to state pension for that year. I didn’t know, my ExH claimed it and I was at Uni, so I ‘lost’ 3 years.

You can also open a private pension, no idea how they work though, are those contributions tax free as well? If one of you knows, please share.

I put in £585 a month. My employer then does a match of £1200 a month.

Yes, @BuddhaAtSea private pension contributions (up to a maximum) are tax free. You may need to claim the tax back. OP you may not be able to change your contributions mid-year but you should definitely have access to a document that explains precisely your company’s scheme.

The equivalent of 32% although it doesn't really work like that because it's defined benefit.

When I was private sector I did 6% and employer matched.

3% isn't going to do very much.

10%. I could probably squeeze a bit more to be honest. I can change my contributions through a portal at work where we manage our benefits, do you have similar?

My workplace pay 10% and I pay10% also.

I put in 5% and my employer puts in 5%. Works out at £666 in total. In the last few years of my previous role I was putting extra in - up to 15% but I was earning less then. I didn’t qualify into my career until 29
and the firm that I worked for on qualification didn’t allow me to join the pension scheme for two years so my pension didn’t start until I was 31. I’m now 46 and have about £110k across various funds. Really need to get it built up as quickly as possible now otherwise I’m going to be very poor in retirement!

There might be better options that your employer pension. Have you looked at putting the extra money into a Lifetime ISA. The gov add an extra 25% on top of what you put in.

www.gov.uk/lifetime-isa

Are you on Universal Credit? You will get more (or may become entitled to UC) if you pay more into your pension, as it lowers your taxable income.

If you are now on minimum wage, you can expect to remain poor in retirement. Another option would be to retrain so you can earn more

I pay 8% and my employer pays 5%. Not a high earner so roughly £125 for me and £70 for employer.

Just so you can see how much you need. I am in process of buying an annuity with my second pension. They are giving a good return ATM. I am paying £50k for £4050 per annum for life. That is enhanced rate because I have poor health. I also get Teachers Pension of £8k per annum. So I'll be getting £12k per annum plus full state pension but not for 6 more years.

If annuity was not enhanced £50k usually buys about £3100 per annum.

I really wish Pension knowledge could be taught in school in PHSE. It is so vital to know and understand about it.

I pay 6.8% into my pension. I think my employer pays a bit more.

This month had tipped to over 500 a month. Not through choice, it's either this amount or none. It's not financially viable to continue to do this but equally I cannot afford not to as i still have years left to pay on mortgage and when i retire my children will be early 20s who will either be living with me, need help with uni or their own place. Wish I had the option to reduce this amount even if it means getting less out later, later I cam worry about but it's tough going right now.

Totally agree. I have no clue about it and I think that suits many employers too tbh

Join the civil service!! That will sort your pension out. They pay a huge amount ;-)

Good for you for doing this now Op. Put in as much as you realistically can. I had jobs over the years that had no pension at all and only now have one with a decent pension plan. Bit late as I'm already in my 50s!
So I will be working until I'm 67 or whatever age the state pension kicks in by the time I get to it.

I pay 7% of my salary and my employer kicks in 14, a generous arrangement. (I work in FS.) In my previous role I paid 12% and they kicked in 6 for a total of 18. I always pay enough to max out employer contributions and I aim to pay a % at 50% of my age. (I know the rule is 50% of your age when you start contributing, I've just decided to do it this way so I keep gradually upping it as I get more headroom.)

My parents were public sector lifers and talked a lot about pensions. I was lucky enough to start work for a bank at 22 that automatically opted you into the pension even when that wasn't the law, so I said "sure" and went with it. Those 3 years' worth of minimum contributions 12 years ago on a grad salary are now worth £50k+. It really adds up if you start early.

In Australia companies are required by law to contribute a percentage of your salary into super. Currently that is 10.5% but due to rise to 12% by 2025 to ensure people have enough to retire on.

Maybe use that as a guide?