to think £1600 a year to live off in the uk is not worth it

[wilsonq2]

Just been offered a pension with my new company. Got the paperwork thought and if I contribute for the next 32 years and it performs averagely then I will get 1600 a year to live off.

Aibu to not join it and just keep my 30 odd pounds a month myself?

Of course it's better than nothing but how can anyone afford to live on £1600 a year? You'd spend more than that on food surely?

Like others have said, you need to consider putting more in each month. I'd say at least £150-200.

Leontine, it isn't enough to live on. However, this is a projection assuming the OP takes an annuity and doesn't significantly increase contributions.

OP, I would view it as a start, try to contribute as much as possible and constantly review options as circumstances change. Fortunately the government changes mean that there will be more options available than just getting an annuity.

Thanks all, in total 9% of my salley is put into it. I know ideally it should be more but it isn't that easy. Plus I see it as risky outing away money that I can't touch that anything could happen to. I'm only thinking about joining as my employer contributes

Assuming your employer is matching what you put in, so your 9% is 4.5% each! that means your current salary is c8k. £1.6k pa is 20% of your current salary, so for your 4.5% now, you'll get 20% later. Based on those figures, it's definitely worth investing in the pension

Ignore random ! Trying to feed baby at same time!

It's not enough to live on but it is £1600 a year more than you will get from the state. There will be no second state pension for you. At current rates a state pension is less than £6000 a year.

Try this question, would you like your pension income to be 27% more than it would be if you don't pay £30 a month?

Also check whether there is any sickness retirement attached, I've been receiving a pension since my 30s, I have already received far more than I ever paid in.

It'll be more than £100 a month when retired. So you can't live on that but you'll get state pension as well. The £100plus a month should cover all your fuel costs which you'll probably be glad about.

I think you'd miss that £120 a month when retired more than you'd miss £30 a month now.

If £30 represents 9% of your salary, I can fully understand how contributing more may present difficulties.

Try to stick with it, it does make sense in the long run.

I vaguely remember the pension people saying that I could retire at 55 and I'd get £96k as a pension amount. This was before my work had to pay in, I've not really looked since then. How much a year is that?

I read a good book a few years ago by the money doctor (irish tax advisor AFAIR) that advised if you are starting to save into a pension in your 20's then you should save 20% of your salary, if starting in your 30's= 30% and so on. I agree with others that you need to pay in more if you expect to get more back.

Does your employer's contribution change depending how much you contribute? When I was automatically enrolled in my company scheme, my contribution was 1% and my employer's was 2%. When I enquired, they pay 7.5% if I pay 5% or more so Iincreased my contribution.

Also check whether there is any sickness retirement attached, I've been receiving a pension since my 30s, I have already received far more than I ever paid in.

Sorry to be intrusive, but does that mean you retired in yours 30s as no longer able to work?

Thanks, don't think my employers amount goes up, but I will ask.

Chunderella do you mean you are employed but dont pay into a work pension? I would find out if you could start one up as surely they have to provide that facility? I know the law changed recently meaning more accessibility to work place pensions. Definitely look into it.

Oh well definitely ask them about it.

AnotherFurry I completely forgot to take a state pension into account. My bad.

wilsonq2

It was the NHS so because I couldn't continue in my NHS role I got the pension, I do work now but not for the NHS. I did spend a lot of time being bitter that the NHS couldn't or didn't want me in a different role, but hey life goes on.