To ask you how much you save every month for your pension

[yousignup]

48, not in the UK but similar pension rules. Work part time so will qualify for percentage of state pension. Many years paid in, but no private pension. Mortgage almost paid off, hope to buy another place in a year or two with another mortgage, so basically my paid for house will be my pension pot. It's not worth a lot, but it's something.
Looking at UK articles about pensions, absolutely horrified to realise that for a modest payout at retirement time I need to be paying in approximately 900 GBS equivalent a month until I'm 65. No chance of employer matching any payment, would have to be private scheme.
AIBU to ask you how much you put away each month for your pension, and how old you are? Just thinking about my old age with a sick feeling in my stomach. Why didn't I start 30 years ago?

I guess at least if you're a Londoner with a valuable house at least you have the option to retire to somewhere cheaper and live off the money from the house sale?

A lot of the posters on this thread are in the public sector
LGPS, Civil service, MOD, Teachers, NHS
all of which have defined benefit pensions

so the 20% employer contributions are because
they will get a pension based on their average salaries when they retire, regardless of contributions.

Out in the real world,
6m workers do not have an employer

and millions more work for employers who are obeying the Auto Enrolment rules of 3% total contributions

towards a money purchase scheme that may diminish in value by more than you contribute every year.

Personally I paid off my mortgage and since then have been throwing that money at my pension every month
but have no expectations of ever fully retiring

Nothing....i will keep working until i drop....i will own a house outright in 4 years so will only have bills etc to cover...im 42 and dont think i will live to an old age anyway.

I work in this industry and to be honest, the majority of people don't really understand pensions. How much they need to save, what their expected outgoings will be in retirement, what the state will provide and when that is and what they need to be paying to achieve the goals they have.

It is a very complicated subject matter and legislation changes all the time.

I would say that the key objectives for all should be:

1. Have all debt paid off before retirement
2. Find out what the State is likely to pay you and when (can be done online)

You can then focus on the other things.

For example if the State Pension will pay you £155 a week at 67 (for some it will be more, for some less)

Then you will be getting £8060 per year or £671 per month.

If you have worked out that you need around £1300 a month then you have a shortfall of £629.

It would be reasonable to assume you will need around £10,000-£12000 of savings for every £50 per month you require so a pension pot of around £125,000-£150,000 would be the objective. This isn't even touching the sides from the detail required but it gives an idea.

This assumes you are happy to retire at 67!

If you want to retire at 60 then you would need to also find the £8060 that you won't get until 67 so will probably need another £60,000 to bridge the gap.

As I have said though it is complicated and there are lots of options at retirement on how to take pensions.

Possum - yes, that's all everyone i know in Londons plan is. We aren't in London anymore. We are in Kent but it's still pricey and the commuting is about £500. I know lots in London living on 20-25k and they don't own a house. They are just living as best they can month to month. Some have parents to inherit from so they feel they will get 1- 200k or so later on. But some have no inheritance and just think 'well the gov can't let me starve' and try not to think about it. We all left babies late as couldn't afford them any earlier (when i left uni i used to clean at weekends to pay for my food as my wages just covered rent and fares). Then saved to buy if we could. Then when bought crappy flats we had repairs and ground rent/maintenance. Then when more comfortable it was now or never for babies and now can't works childcare is so much, so have no income. So only those with property or parents with property are going to have anything.

I'm amazed also at the employer contributions as I thought I was getting a good deal. Mine pays in 11%; I pay 9% (pharma sector).

Only just started a work place pension so think it's 3%?

I pay in 8%, my employer puts in 18%. I have no idea if that is good or bad!

But MrsK you two must be in the top 2% of earners. And - forgive me, I remember your DH 😀 - doesn't he have lunch in Pizza Express every day? That's not 'living in London', that's just a different choice.

I'm not judging btw - I realise I care more about my pension than most, because of my mother's experience, and prioritise it for that reason.

The 18% employer contributions are instead of paying us more as straightforward salary really.

Between us my employer and I pay in more than £12k a year in contributions. That adds up to quite a lot over 40 years (and theoretically they pension scheme are supposed to invest it well so that it increases in value - whether that actually happens or not if debatable though). So I do hope to get something back from it.

I suspect the scheme would look a lot healthier if the percentages paid in had been more realistic years ago and large numbers of people hadn't been grossly over-promoted in the couple of years before they retired to boost their final salaries (because it used to be a final salary scheme).

I'm 35 and my employer pays 14.3% and I pay 12.5%. If I retire at 60 I'll get about £2500 per month with £100k lump sum. I feel quite lucky (so long as it doesn't change too much).

I'm 34 and have been paying into a defined contribution for 2.5 years now. I pay 8%, my company pays 12%. I'm not in the UK and tax on pensions is probably different here but my total pension contribution of £1,000/month (on my £60k salary) costs me c. £215/month.

Husband has been paying into his pension (7% his contribution, 8% from employer) for 15 years. It took a dip during recessionary years but is currently worth £150k.

I'll inherit a house valued at £770k from my parents, and he'll inherit a house worth £280k from his so I'm more concerned at the minute about having investments and savings to meet acquisitions tax.

Some SERIOUSLY high rates here
especially of employer contributions

the UK average is 5%
and half of all workers have no pension provision at all

Ha! No that went out when kids arrived, the budget I gave you is when he now he has a packed lunch and breakfast at home.

We are way more fortunate than others and I met dh when I was 32. I had saved and bought a flat before then. I am talking generally about the people I grew up with. When dh and I met we saved 1k a month for 3 years to put towards a deposit for a house. We couldn't do anything like that now. I feel so sad for those younger than us. I just can't see how they could manage to live and save such a percentage.

Oh I agree with you there. God knows what will happen.

We don't TP and this thread has shocked me! We'd thought maybe we should pay the house off first. It's not even a nice house in AA nice area but I cant see us affording more.

This thread made me look up my entitlements. I need another 3.75 years for £155. I'll pay that by the time I'm 60. So, why do I have to pay NICS until I'm 67 then? I think I pay about £300pcm and my employers rather more. I'm 56 and quite well pensioned.

Self-employed. Can't afford to pay into a pension pot and because I'm self-employed, there'd be no employer's contribution, either. I also worked for several years abroad and no idea how I'm going to be able to transfer my pension from that work to the UK, because they will only transfer it to a UK employer, not to me directly. I have a pension from my previous UK employer, but it will be tiny and certainly not enough to retire on.

Ironically though, because I employ someone as part of my business, I am now obliged to offer her an employer's pension, even though I can't afford to have a pension myself and all the risks of the business fall on my head.

I'm basically resigned to the fact that I won't be able to afford to retire .

The horror stories about pension deficits a la BHS relate to defined benefit schemes in the private sector rather than the more recent private sector defined contribution schemes. The latter pays less and is dependent on the vagaries of the stock market. However, whilst the investment risk of a defined contribution scheme as to how well the pension portfolio performs sits with you, you also own the entire investment and the company cannot dip into it. Defined benefit schemes in the govt/public sector should also be fine to the extent the UK govt is not likely to go bankrupt, Brexit notwithstanding.

Forgive me if this is an incredibly obvious and stupid question, but isn't the issue with such schemes that you have no idea if they will be inflated away to sod all? Like if you have a pot of, I dunno, 150k, but that's not worth that much when you come to retire?

I really don't understand pensions, and echo what the poster upthread said about most people not getting it. My own pot is only a couple of grand and I'm in my early 30s. Seemed more sensible to try and deal with housing matters in the short term. People say it's silly not to save as it's free money, so DH puts in as much as his employer matches although that's still a pretty small amount. I have bobbed around, consulted etc so hasn't seemed worth putting into a pension because there's a different one every time.

I'm early 40s and am worried that the state pension will be gone or means tested by the time I retire. So I will have sacrificed for years to pay into my pension and then possibly be penalised for having a pension. And if that happens with a private pension of 7k a year I will be struggling.

Started a pension at around 26, I paid in 4%, employer paid in 8%
I've moved jobs in the last year. Now I'm 30, paying 4%, employer paying 4%
The aim is to increase to 5% and the 6% over the next couple years so I'll have contributions of 10% at least.
Ideally I'd like to pay in more, but am conscious that I want to make sure that I'm setting myself up well for the next stage of my life too, so will be saving into a credit union and more accessible savings accounts too.

DH has only the autoenrollment amounts at his workplace, although I've convinced him to pay in more, so he's paying in 4% and ER at circa 1%

Unless you are paying in over 20% of your salary every month you will not get enough to live on

DB pensions area nasty Ponzi scheme that will blow up in the next 15 years

I am not assuming that I will ever stop working
because I have that option.

My clients who are physically broken and unable to work any more at 52 are utterly screwed

NObettername: a pension will reduce your tax bill

I pay 9% and my employer pays 16%. That currently works out at approx £300 per month. I'm a teacher so while it sounds good so far they have already changed the goalposts since I started teaching 12 years ago, and I'm fairly certain that the goalposts will change again in the 30 years till I can claim my pension.

Dh has no pension and doesn't seem as if he's planning to start one . His plan seems to be that he will continue working as long as he is physically able to, then my salary/pension will be enough to support him as well. He is anticipating that he will die before pension age actually, because all the men in his family seem to due suddenly in their late 50s, he will be genuinely shocked if he lives to see 60, which is a rather sad state of mind.

armani
You are right that betternames pension contributions for her employee will reduce her tax bill
but sadly sole traders cannot make employer contributions to their own pensions ....

the wonks who work in whitehall just do not understand the land of self employment