To ask what pension plans you have in place

[Toystory4]

I have around £40k in a pension pot and save around £100 per month and the company pays similar I am 48.

I went to see the company's pension adviser and he said I really need to be paying a lot more if I want a decent income in retirement. He worked out the figures and said somewhere in the region of £600 extra a month would get me back on track and help me have the pension I want in retirement. I was shocked that it would take this much and that my own savings were on track to give me as little as £80-100 a week in retirement.

Anyone else in the same boat and worried about it? I am single so have to look after myself.

[WongTobyWong]

Piglet - I meant retirement planning generally, not just pensions. I'm not sure what his commission is, but it's considered mainstream advice to put retirement over education saving. My parents have left their entire estate to my children do that will bolster whatever college funds they have. (Unless my parents need care assistance and have to sell their house to pay for it.)

[decisionsdecisions123]

Scary thread! Just a quick question for anyone who might know, if someone has been working for the NHS for a max of 10 years, earning something like 16-19,000 a year and paying into the pension is it likely that upon retirement they would get a lump sum of £12000 plus an amount per month?

[PigletJohn]

You can get a Pension Calculator Tool (I will look for a link) but it depends very much on what your assumptions are for growth and inflation. For example some people look back fondly to the days of high interest rates, forgetting that inflation in those days would erode the value unless you were wise enough to pop your clogs quickly. Pension charges also used to be much higher than is obtainable today, which crushes your growth when it is only a few % above inflation. People also used to die younger, which meant your fund could be cut into fewer, bigger slices.

The biggest thing to remember is that the sooner you start, the better it is. This is not just a factor of the number of years, but if you start at (e.g.) age 20, and your colleague starts at (e.g.) 25, your first five years contributions will have been growing for 40 years before you draw on them. If your colleague works until she is 70, her extra years will have very little growth. Compound growth is a wonder of the world.

Here's an example link. There will be others
www.standardlife.co.uk/c1/guides-and-calculators/pension-calculator.page

[magicstar1]

I'm 40, and have had my pension since I was 22. I started at €50 per month and kept increasing it. For the past 12 years or so, I've paid in €700 per month.

[Peevedquitter]

Decision they should receive an annual pension statement from their employer or whoever the NHS gets to administer their pension.

[jellybeans]

None, in my late 30s. However DH has a spousal one which is very good. If we split I would be entitled to some. However I am retraining and when qualified may start my own. Problem is I have anxiety issues and often don't think I will be around to get a pension! Strange I know

[MaidOfStars]

I'm in the Universities scheme. This has been 'final salary' but will change in April to 'career average'. Apparently, my final salary benefits will be locked, although it's not clear whether my eventual payout from this pot will be based on final salary at the time the scheme ended (so current salary) or final salary at time of retirement. I'm also not clear whether payout from the newly-created 'career average' pot will be based on whole career average earnings or average earnings whilst in that particular scheme.

I have no idea how much is in my pot. I pay about 8% and my employer 21%, and have paid in for 12 years or so (continuous service). The USS benefits modeller is shit.

If any other USS members know what's happening, let me know! I've never had a head for this stuff.

[tiggerkid]

The recommendation is that you contribute half of your age in terms of % of salary to have a reasonable pension pot. So if you are in your 20s, you should be contributing 10%, in your 30s - 15% etc.

I know most people can't make that but fortunately most employers make some contribution these days.

Sadly, unless you are in final salary pension schemes, which are almost non-existent for younger workers today, we will all be affected by the state of stock markets, which will affect what we will be able to get out when we reach our retirement age.

[sweetsummer]

I've never been able to save for a pension as my earnings were too low - my last employer had plans to introduce a pension in the next year but I left before that happened. I've been able to get Pension Credit recently though, the amount I get between me and DH is only a bit lower than our income when I was working, and with all the extras and getting full council tax support our disposable income works out at a similar level. Pension Credit is £265pw for me and DH - works out to over £15k per year if we add on council tax support, and we would just get the same amount if I'd paid into a small private pension, so I'm glad I didn't in the end. On a low wage I've always needed every penny I earned, and I wouldn't have been able to pay in enough to not need Pension Credit.

[AdventureMathematical]

The half your age percentage is very generic and might not be right for you. Normally a financial adviser will go through your expected outgoings in retirement and work out how much you need to contribute to meet your requirements. OP is 48, if you plan to retire at 65 someone of that age could realistically expect to be retired as for long as they were working, say 45 years. That takes a lot of capital and the cost of providing a decent standard of living in retirement can take people by surprise.

[Lancelottie]

I'm sure I've seen the 'half your age' calculation cited as the amount you need to put in depending on the age you start your pension, rather than throughout your life.

[Anotherusername1]

I wonder whether anyone currently aged under about 45 will actually retire! I will probably carry on working part-time or doing projects for say 3 months, then having some time off and then doing another project etc.

My SIL retired recently at 60 and I was a bit flummoxed. That seems so young to stop working altogether!

I have various small pension pots from various jobs. My mortgage will be paid off in about 5 years so I will be able to put more into savings after that. I'll probably mix savings and pension contributions.

I think a lot of people think they will have inheritances but care home fees can eat into that very quickly. And if you give up work to care for an elderly parent then you have no/very little income so there's no good solution.

[Babycham1979]

Eeek. This is quite an eye-opener! I'm 36 and currently in a public sector final salary scheme, where I conrtibute £950 per month, and my employer contributes around £600.

I intend to have paid-off my mortgage long before I retire (probably at 68 based on currently predictions), so I'm guessing I'll be quite comfortably off in retirement.

I have always known that I pay a lot in (and that a final salary scheme is worth its weight in gold), but I'm genuinely surprised by most of the replies on here.

[changename54]

My DF is a single pensioner, drives a car, goes on holidays, doesn't have to scrimp and save, and he says he happily lives on £17k pa (North of England, mortgage paid off). So I'm aiming for £20k pa for myself from a mixture of state and private pensions.

Some years I pay in 100% - yes 100% - of what I earn into pensions. Even in years where I don't earn anything I still pay in the £2,880 which the Govt allows you to pay in and tops up to £3,600 on your behalf. There's no way I want to be cold and hungry when I'm old so I prioritise my pension. As I understand it, the change to the flat-rate higher pension that's coming in is supposed to do away with the need for Pension Credits or any other top-ups from the state, so I think people who aren't making their own savings thinking the state will bail them out, might be disappointed.

[Babycham1979]

Agreed re the minimal likelihood of future state support beyond anything but the very bare minimum. It's frightening to think of the number of people who are making no preparations and counting on the state and/or inheritance.

The inheritence issue also relates directly to the inevitable bursting of house price bubble. We are living in an utterly unsustainable economic environment at the moment, and politicians are doing nothing but kicking the can down the road. The longer this continues, the faster and more painful resolution will be.

Also, if everyone's counting on cashing-in their anticipated inheritance in order to survive their dotage, one can only assume that they will have nothing left to pass on to their children. Assuming housing demand will still outstrip supply, and that pension provision will be residual at best....what will they be expected to subside on?!

[suzannecaravaggio]

Nothing can be assumed about the future

[Figmentofmyimagination]

Decisionsdecisions123 you can get lots of useful info on the NHS pensions scheme and the 2015 scheme changes from the unison website - just google 'UNISON NHS Pension Scheme'.

[50000LiraForMyThoughts]

I pay 7% of my income into my pension, and my company matches it by x1.5 (so, 17.5% total), I've been doing this for the 12 years I've been employed by them but prior to that I made no contribution whatsoever. That's the max amount I can pay into my workplace pension.

I'm 38 and really over-cautious and now I sort of wish I wasn't bothering to pay into a pension, I know loads of people my age who haven't got one.

Have very few savings right now, our money is all in property. DH gets a full military pension but since he left the military he hasn't paid into any kind of pension fund (he's now self employed).

[hefzi]

I'm single, renting and will never be able to afford to retire.

I am also aware I need to put more into my pension - I have a small one from USS, who seem very good about going in to universities and explaining to staff how it all works - and a larger one from TPS, who are shite (if anyone knows how that works, please PM me ).

I can't work out from my payslips how much I am contributing, and how much my employer is contributing, and I am a little hamstrung by the fact that a) I've only been in a scheme at all for 7 years (worked overseas before, and this was for bare minimum expenses only). I also have debts I inherited from my XH which means I've paid off more than most people's mortgages in the last 8 years, so I have a tiny, tiny amount in savings (hundreds, not thousands).

The thread on earnings left me really down-hearted, tbh - so many people with disposable incomes higher than my take home pay, when I habitually work 70-120 hours and seven days a week, week in, week out: seven years of higher education and I'm not even a higher rate tax payer! But I am heartened, in a weird way, to see that I'm not alone in pension confusion, apart from knowing I need to put in more as soon as the debts with interest are finally gone.

[hefzi]

Oh, and no inheritance: my parents' home is their pension (they were advised this by their accountant) which they are struggling to sell - and neither of them inherited from their parents either. I am a bit at people who have factored inheritance into their retirement plans, but perhaps I would do so if I knew anyone who had!

[CPtart]

I've been paying in the NHS pension scheme continuously since 1991, albeit part time hours only in recent years. I know the terms have changed and it's not as good as it used to be, but I think it's still pretty good and as I have special class status can start drawing it when I'm 55. There's no way I still want to be nursing past that age anyway, so the plan is to go for it and if I still need or want to work, do a few hours in a much less stressful environment. I don't factor in inheritance at all, but both sets of parents are reasonably well off and a windfall would be an added bonus. After caring for ill people for the best part of 35 years I'm certainly willing to chance retiring early.
PIL have set up trust funds for the DC too.

[whois]

Pot worth about £30k, been working for 7 years. I pay in 7.something % and my employer pays in 4.somethign %. I used to pay in less, have risen from about 4% up to this as I have had pay rises.

[whois]

I am a bit hmm at people who have factored inheritance into their retirement plans

Yeah because what with care home fees now it doesn't take too many years of needing a nusing home bed to use up all your parents cash and house equity!

[DyslexicScientist]

I't does seem to be a theme on mn that most people are assume to go into a care home. I'm my life, none of my grandparents or step grandparents ever did this.

I'm also counting on inheritance, it may come it may not but no reason to ignore it.

[Babycham1979]

Dyslexicscientist, that's partly a result of lower life expectancies and fewer age-related co-morbidities. Unfortunately, most of us (and our parents) will live longer and longer with greater frailties and will be increasingly dependent at a time when social care budgets are shrinking.

It makes me think of the Government's new alcohol guidelines; what's the point in extending life expectancy if those extra years are of a much lower quality (and higher cost)? It's nothing but vanity. We'd be better focusing resources on quality of life, especially for the vulnerable, and to hell with extending the length of it.

The pursuit of longevity is also what's made the previous pension system utterly unsustainable. When it was introduced by Lloyd George, the average (male) worker died before they were even entitled to retire!