How much will you receive from your Pension?

[WinteryWonderland]

I'm on track for full state pension after checking recently, so that's something. DH is also on track and has a private pension, but we've been advised to up the payments by £500 month 😬 like we have that surplus floating around!
I just wondered what other people have in place and how much that will provide yearly when you retire?

Good news about the annual allowance having increased.

This is depressing. I had to do a pension forecast as part of my divorce FO and I do not qualify for full state pension, just partial but that's only because of child benefit stamps (thank god!!). I cannot work due to health issues but can't claim benefits either because DH earned over the household threshold. He has full state and six private but i don't know the amounts.

About 30k pa plus state pension, but I've still got 20 years until retirement and a lot may happen in the meantime. Also investments that bring in about 15k/year. It's more than enough.

@PoppyChia glad you checked - I know several people who got a shock.

I have £2k per month private income plus £850 per month widows pension.
A couple of small employers pension schemes probably approx £1k per annum each but have been self employed most if my working life.
Seem to be a couple of years short on state pension due to opting out that I wasn't aware of (think part time job when student).
Mortgage will be paid of next year when 50 but need to support my SEND child so am still working until I think I have enough saved to have the retirement I want whilst also looking after them

If you were paying contracted out NI at any time prior to 2016 this can impact.

Im 45 and need to contribute another 2 years to get a full state pension, so that should be fine. Then I'm in the LGPS and I've currently accrued £14k per year and I've got 20 years left to work. I've also got an AVC account with about £6k in it at the moment but that will increase about £6k per year with my contributions so hopefully a decent lump sum.

husband has very little though so I've got to provide for both of us

I'm 40. Private pension pot of around £500k. What will that give me is anyone's guess. I am not keen to keep paying into it and would prefer to just build up ISAs and savings, but I pay in to keep my taxable income below £100k (otherwise I end up worse off due to childcare benefits cut off) so end up adding about £25k per year from income. I presume I will also qualify for full state pension when I get there. Have around £9k per year in dividends which will probably continue. House will be paid off and is currently worth around £950k - we will sell it and move somewhere cheaper. Expect to have at between 200 or 300k in savings as well by retirement age. DH is in defined benefit scheme but was a student forever so has not built up many years (it's not based on final salary but still a lot better than DC schemes). If he carries on his pension will be about £50k in today's money plus a modest private pension of around £10k and probably full state pension too. I worry we will not have enough to support us and to give the help to our children that we would like to give them. We have family overseas and travelling to see them is important but increasingly expensive so limits what we can save. We will both probably also get some inheritance but a lot of this has already been passed on, probably another £200k but this will go straight from us to our children unless we need it. I don't think we can rely on the state pension being there, nor the other "perks" all pensioners now get. We expect it to be means tested and also for the NHS to be massively reduced and so expect huge health and social care bills. I don't think we can even rely on our private defined contrib pensions being worth anything. I know too many people who lost so much money from their pensions. House prices could also massively tumble. We live in a popular area which has sticky house prices because of the good schools and grammars. A change in policy on grammar schools and we could see house prices collapse. So I take nothing for granted and will save as much as possible over the next 25 years. We may retire overseas where it is cheaper (DH is dual national) and money will go further but will cross that bridge as and when.

State pension plus Local Government pension of 48k a year if I work til 67.

However, there’s no way I’m working til 67, so I’ll be retiring early and taking a reduced government pension.

Wow, would a teacher really get £60k per annum from their pension scheme? I thought they typically earned around £35k - £40k when working FT!

38k plus state pension.

Also 110k privatly owned.

I have no pension fund, private or otherwise.

I imagine state pension will not exist for much longer adn due to circumstances, have not been able to contribute funds to anything private.

My retirement plan is a bullet to the head.

Besides, the UK is an ageing population. Unless people suddenly start having kids again, where do people think the money to pay for those on retirement is going to come from?

Thank you - been checking everything ever since!

I managed to get that wrong too - I need to work until 56 (I am 50 now) to get the full state pension at 67, I think...

My current employer's pension I quoted is if I stop paying in now but start receiving it at 60, so that will be more healthy if I keep working too.

Wow, gosh I wasn’t aware of this???

People over state pension age are exempt from NI on their earned income. Therefore if still working at that age you need to log into the Government portal, check your NI record and manually top up NI with additional voluntary payments if you need these years to access full state pension and it will be economically beneficial to do so. Tbh it's crazy that pensioners are exempt from NI, especially given the two national expenditures that drawf all others are state pensions and the NHS (80% of the cost of which relates to older people). But that's our Government's level of logic for you!

Someone said further up the thread that we should be embarrassed to discuss these matters, I have been on MN for twenty two years and picked up invaluable information on pensions amongst other things.

So no, I don’t think anyone should be embarrassed, and I don’t think they should be made to feel embarrassed.

When I was first on here, annuities were considered the work of the devil, DH had had them rammed down his throat by his pension advisers and thought they were the Holy Grail, constant drip feeding from me from MN eventually brought him around.

So I do think these threads are useful.

I earn 27k, full time. Only pay £50pm into work place pension. I'm projected to have something like 50k at current retirement age, if nothing changes. This is obviously not enough as I'm 32 and there is unlikely to be a state pension by the time I retire. I currently can't afford to contribute any more to it, and unless I'm able to earn a much higher salary compared with COL, I'm unlikely to have anything close to a decent pension. Which means I'll likely be working into very old age. Or I could drop to 22.5 hours, claim universal credit and spend more time with my toddler, live life whilst I can and only lose £100pm in doing so.
Crazy world we live in.

Main pension between £4000 and £6500 depending on lump sum taken plus a smaller pension. Then when I hit 67 a state pension.
DH already has his and as we have no mortgage we're not too badly off

Should be a full state pension plus civil service pension of around £55k a year if I continue to state retirement age of 67. Joined the civil service at 22, so would have paid contributions for 45 years. Feel incredibly fortunate that a decent pension, and bring mortgage-free by then on a property that I intend to downsize from, will mean I should have a comfortable retirement.

@PoppyChia remember you can pay class 3 voluntary NI contributions if you want to retire early. So don’t let that be the reason you keep working.

It’s about £850 for each year but less than 4 years of state pension will see you in profit.

You pay based on the current years NI rates but in the intervening years state pensions rise. So when you draw your pension 1 year in £ terms is more than the amount when you paid the NI. I know this sounds complicated so here is an example with figures:

2020/21 Class 3 were £15.40 and full state pension £175.20 a week. So c£800 bought 1 year’s pension at £5.00 a week or £260 a year. Draw your state pension for 3.08 years and you have earned back the £800.

However, the 2023/24 state pension is £203.85 so that c£800 is now worth £5.82 or £302 per year. Which means drawing state pension for 2.65 years earns back the £800.

Note: This is partly because CPI has been so high.

This makes no sense. Why voluntarily pay NI over state pension age only NI before state pension age boosts your pension.

As a pp said, pension pots are connected to Defined Contribution (DC) pensions whereas your DH's pension sounds like it's Defined Benefit (DB). Making a number of assumptions about the future, though, it is possible to estimate its value and compare it with a DC pension pot.

£1,800 per month pension is £21,600 per year. As a very rough estimate, it can be valued by multiplying it by the number of years it's expected to be paid. (In practice, it's much more complicated as you need to consider things like level of pension increases, the pension you receive if he dies before you etc but it gives a very rough idea.) So if he retired at 65 and perhaps on average he might live to 85, that's 20 years so £21,600 x 20 = £432,000. Add on the lump sum he received of £90k to give a total pension pot of £522,000. If he retired before 65, then it will be higher as the pension will be paid for more years.

The key message here is how big a DC pension pot needs to be - half a million or more in the example above - to provide what you probably consider a fairly average pension. And conversely, how much it costs to provide DB pensions. Trouble is definitely brewing when people with DC funds retire and realise that what seemed like a big pension pot doesn't actually provide much.

Dh and I both local government workers and should both be entitled to a full state pension at 67. Our combined defined benefit income will be about £55k per annum plus say £22-£24 K from state pension and our lump sums around £60k. We won't be much worse off than now. However, ideally we'd like to retire earlier than 67 and free up more of a lump sum to give dc a house deposit. We might retire on a lower pension but work a few months of the year to top up.

We're thinking there'll be spendy years from say 62-75 with travelling, home improvements etc then things will slow down as our health/mobility may decline after that. We might be more home based then but might need to factor in care costs.

This makes no sense. Why voluntarily pay NI over state pension age only NI before state pension age boosts your pension.

I think you've misunderstood. Apologies if it was poorly worded. I specifically said NI is not paid over state pension age therefore working after that will not increase state pension entitlement because no NI is being paid. People need to log onto the Government portal and check their entitlement years prior to retirement and consider making voluntary contributions to make up any gaps before they retire, if that is economically beneficial.

The state pension is a terrible economic deal for anybody earning a higher salary because the amount you receive is a flat rate and not related to what you have contributed as state pensions are in most countries. For lower earners/ people who have spent long periods not working the UK state pension is an amazing deal which provides them with many times the income they'd have had if their NI contributions had gone into a DC pension scheme. The benefits of making additional contributions to top it up will vary based on individual circumstances: your health and how late it is likely to be paid for your age cohort, how much is being asked for in top ups, what level of private pension provision you have made, and crucially whether the Government can be trusted not to move the goalposts and raid pensions again through taxing private funds more yet again or reducing allowances to penalise people for saving or changing eligibility for pension credit or even (if they want state pensions to vanish entirely within a decade or two) trying to means-test state pensions. Nobody can know all of those variables. We really need stability in the system so people can plan effectively because all of this is a lifetime-long planning exercise. I was simply telling the PP where they can check their record and get the data to make an analysis on the state pension side of things considering their own circumstances.

It also seems that the more you get paid in the private sector or at least in my profession the higher the stress, longer the hours and it really doesn’t make any sense because you don’t get huge pay rises for promotions (especially when the tax man takes his extra slice (!!) and you pay for extra childcare for when your having to work longer hours).

I’ve known I need to change at the very least employers for awhile but it’s good to come on these boards discuss things as it really gets you thinking!

I also found working from home during Covid fascinating because you get to see how other people (including other half) working day is for their wage and realise you work far to hard for your own lower £££ yet we are at the same level !!

Have paid maximum amounts into my pension since leaving Uni. Now in my early 50’s (DH two years older) and we’re winding down our working lives and retiring next summer. Pensions and investments are in place . Will get reduced state pension as won’t have paid in the full number of years. Not living in the uk now but will still be able to claim some uk state pension at 67.