How are you planning ahead for retirement?

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Every tax year end, I review my pension pot online and scare myself!! I’ve always saved towards my pension, but the calculator showing my predicted annuity at age 65 (just over 20 years away) is no where near where I’d like it to be. Every year I’ve been putting 10% of my gross salary in and my employer also puts 10% in. I think I need to increase this.

I brought the topic up with 6 of my closest friends recently and all of them seem blissfully unaware and unconcerned about their future pensions or retirement. We’re all of a similar age, 3 have been SAHM for the past 10-15 years and don’t work or have anything saved other than state pension. Although even then, I don’t think they know they haven’t put enough NI contributions in the pot to get that full amount.

I’m planning to find an IFA to get some advice. Wondering if you’re planning for your future retirement? Or do you not worry about it?

Also, if anyone has any financial planning books that they’d recommend, I’d be grateful to hear.

I don’t have enough income to pay into a pension. I have an £80k house that I inherited from my Gran, the rent from my tenant will pay off the rest of the mortgage and then I’ll be able to sell it to fund my retirement. I reckon I can get maybe another £100k out of my current house by downsizing. So I’d have £180k to top up my state pension (£1k per month for 15 years) and no mortgage. That will hopefully see me through from retirement at 70 to death at 85.

I work in finance and most people don't buy annuities anymore. They're not very good value at present and there are more flexible ways to access pensions when you retire.
The more you can put into your pension when you're younger the better, and if you're a higher rate tax payer particularly as you get get the tax relief plus save on income tax.

Also if you are 10+ years away from accessing your pension, you probably want to be invested in mainly equities. This is more risky but you can't touch the funds for years and the investment returns will go up more over the longer term.

I will have a widows pension and 100k life insurance from DH once he dies - he's older and unwell - plus already own two mortgage free properties totalling approx 800k. Also will inherit over 300k from elsewhere. I hope this all covers the fact that I don't have a pension. If I die before DH - because let's face it anything can happen - then I won't need a pension anyway.

I contribute 40% via salary sacrifice, with a further 4% matched by my employer. My pension follows a better index than the UK one. In less than 10 years I plan to max out my pension, then let that grow until I'm 55 and I can retire early.

I had a bit of luck and took some good advice in my 20s. At least half of my pension is from a final salary pension I paid in a lot (at the time) of money into for 10 years when I was in my early 20s. I then got an IFA a few years ago and I'm paying in over 15% into a private pension and 7% into my work pension. I'm looking to retire at 60 on about 2/3 if the salary I'm on now. But I shouldn't have any mortgage by then, so my standard of living will hopefully be about the same as it is now.

I always knew I'd never had any inheritance to rely on so always squirrelled a bit of money into a pension.

My dd is 13 and I'm about to talk to my IFA about setting her up a private pension that I'll pay a few quid into each month, so hopefully she'll take in herself when she starts to work

@sbhydrogen

I contribute 40% via salary sacrifice, with a further 4% matched by my employer. My pension follows a better index than the UK one. In less than 10 years I plan to max out my pension, then let that grow until I'm 55 and I can retire early.

Not sure whether you are in the uk but if so can I ask what you are planning to do to bridge from 55 till the pension is available? ISAs? (it sounds as if you are not reaching 55 for more than 10 years)

40%!! Wow. That’s a significant proportion of your income. Is it worth it to limit your income now to such an extent for something you might never see the benefit of? Or is that much for a reason, due to leaving it late or whatever?

40% contribution to a pension for a higher rate tax payer i can't work out the impact on net pay but it will clearly be less ...

Do need to keep an eye on the annual £40,000 contribution limit

DH is 7 years older than me. We both have reasonable years in defined benefits schemes, and will have full NI records, but due to scheme changes will get some pension at 60 and the rest at 65 or 67 (when the state pension kicks in). So it's a bit staggered. For this reason we are putting a recent small windfall of £60k towards providing additional £12k income pa for the 'five year gap' from when dh is 62 and I am 55, until the rest of our pension income gradually kicks in, at which point we will be sorted. We're aiming to have £30k pa to live on. That's less than half what we have now but we won't be supporting the children then. We will use lump sums for travel. So I am very fortunate (also thanks to planning and life choices) to be able to retire early (want to travel and have an active outdoors early retirement with dh and don't want to wait until he's 67 in case health worsens). Might also continue working freelance a bit. Mortgage is paid off and can release equity by moving. Feels amazing to have it sorted thanks to this windfall.

@Mia85 - You didn't direct your question to me, but I have an additional pension to bridge the gap between 55 and claiming my main pension.

It's a stakeholder pension with a very well known provider. Stakeholder pensions are not so much in favour now (mainly because of the capped low charges/ no commision, I suspect). However, I have found it to be very flexible in terms of simplicity to open and manage, low minimum contributions, being able start and stop contributions at any time, and flexibilty to choose and change funds.
They can be opened directly with the provider, without recourse to a IFA, if you feel confident to research the product yourself, (and also you can open one on behalf of your children).

Hi, it’s a long time since I posted but I think I was asking the PP what she intended to do to fund the time between 55 and her minimum pension age (I assume ISAs). Of course if you are already in your 50s or have a protected pension age you can plan to access at 55 but the rest of us will have a few years gap and it seems to be a moving target. Personally I think it’s unreasonable to change the minimum access age for contributions already made but sadly the govt doesn’t appear to share that view!

I will have a public sector pension with 25 year of contributions but I’m not sure I can manage to do my job full time until I’m 68. I was low paid/unpaid for years (too long) when the dcs were small and I’ll never catch up. For the last few years I’ve emptied my current account into an isa at the end of March but how much that has been is variable. I’m saving £140 a month into an isa but it’s small potatoes. Dh is self employed and has no pension. His plan is to sell his business but it might not pan out. The business owns property so that should be secure. We will be mortgage free at 52 so that will free up cash for more savings and we will be able to downsize eventually too.

We save a lot (and appreciate we are lucky to be able to). SIPPs , LISAs and ISAs max out company employer contribution schemes . We aim to work till 70 to hopefully help out DC and DGC if we have them. We aim to downsize to ensure housing does not incur inheritance tax. SIPPs are great as outside your estate for inheritance tax purpose (may be subject to income tax if been drawn down/over 75 when die, but always check Gov website for any changes etc-so don't quote me on that!). Make the most of tax relief in the various schemes.

What's my plan? Well...it's not written down and I'm not sure it 'adds up' but rough mental sketch:

• continue to pay into my own pension through employer (a little over the mandatory amount) obvs employer matches.

• pay into stocks and shares ISA and just forget about it. I don't max it out though...I'm not made of money!!

• stick with my descision to not have kids (too much hard work and too bloody expensive)

• eat very basic food in order to pay for some pending home improvements with as much 'cash' as possible vs releasing equity. No shop bought coffees... Wear what you already have. Use coupons without shame. Save like mad, borrow what you need to get the works done but pay off as much as you can by over paying mortgage after. Try to negate it.

• do not have kids...did I already say that?!

• do not get married or pool finances with anyone risking 50%

It's not scientific but....