If you are retired and have a good life, can I ask how much pension you draw?

[User5512]

I tried some calculators and they all gave me vastly different numbers.

I’d like to know (roughly) how much money does a couple need to have a good life in retirement.

If you are retired, would you be kind enough to give me a rough idea of your lifestyle and how much pension you get?

thanks :)

We are about 70 and have only fully retired in the last year. We are currently working out where we are. One thing I have noticed is that so called inflation proof pensions don’t always turn out to be so. Friends who retired in their 50s are finding that their workplace pensions don’t go as far as they used to.
An elderly relative had a very comfortable teaching pension when she took it at 60. It is not worth much now in her 90s.

DH pension around £24k. I drawdown tax free allowance £12,500 annually from workplace pension. ( retired aged 57).No mortgage . Live comfortably, at least 3 overseas holidays a year, newish car etc. I could draw more income but don't need it and don't want to pay tax. I will take NHS pension this year and reduce drawdown. State pension still 6 years away.

How on earth is everyone's pension so big? I'd love to know how long you paid in for and how much pcm or as a percentage of your salary!

The population of MN is very, very skewed and does not represent the bell curve of society.

Why should it be exempt? If you are getting income over the threshold then it is taxable. Why should it be any different than a private pension? You probably benefited, as did I, of the very generous rate, over 10% per annum, for deferring your state pension.

Most of these figure far exceed what I currently live. I'm assuming my retirement needs will be less.

My DH and I draw down 70k per year from our pots. We retired at 52 and 55 and have a very good life. Approximately half the income is spent on holidays and pension pots are 1.5 million plus we’ll get state pensions in just over 10 years years time.

Fml
I was already depressed today.

I'm so pleased to hear you say this! I was reading figures which exceed what we live on as a family of 4 and thinking how can this be normal? I don't think it is normal to be as wealthy as people are saying here and in some ways the responses from the rich are not that useful to average folk. But there also are some responses from people living on my modest means.

Let’s all hope sense prevails - this was terrible policy. By all means cap the amount of tax free contributions for any given year, but the LTA made it very difficult to plan in a sensible way given uncertainty around how investments will perform and how the government will adjust the limit (or not) to account for inflation. With LTA, If the market outperforms expectations people have a strong incentive to retire early (reducing economic activity and ultimately tax take) and in situations where the market underperforms people are potentially more likely to be caught out with less they need if they invested less than the could have to avoid potential penalty.

for those of us with private pensions invested it takes decades of contributions to build up a meaningful pot, but the last 5 years of market performance has an outsize impact on retirement and is outside any individual’s ability to predict or control.

Take heart. The number coining it are in the minority and some (lots?) On here are lying through their teeth!

On here are lying through their teeth!

Are they, or did they have high paying jobs where a couple of thousand per month was paid into a pension by employer and employer?

Who lies on an anonymous forum? I’ve never understood why people jump to assert ‘lies’ when they don’t like the answer or when it doesn’t align with their own financial circumstances.

a more valid criticism would be the fact that responses are not representative- op has asked for input from people who are comfortable, which automatically skews responses to the higher end of retirees. A shocking proportion of retirees are not comfortable- for reasons both avoidable and not. As someone of a similar age to op, the interesting question is not what is average, but what I should be aiming for to be comfortable.

No need to lie I have a private pension from one company and a final salary pension with my current one. I just need to stay working here for rest or my life and that pension alone will give me an annual pension income of £25k and then add kn state pension around £9k and ill have a total annual amount of £34k before tax. Then if I had a partner there would be his to include too.

That’s an interesting point but all those benefitting from public sector pensions have paid contributions throughout their working lives. It’s not free money. £400+ a month I have been paying for the last couple of decades ( the % of contributions doubled 20years ago) would have made a significant difference to our standard of living. But planning for the future rather than living for today was more important.
I could have tripled my income working in the private sector but my socialist tendencies meant I was committed to providing NHS dentistry. You are no doubt aware of the current crisis, due in the main to my generation, 55-60yr olds leaving the profession like rats from a sinking ship. The same is true for doctors. But we have paid for our pensions, how it is managed is not our fault. Most would have felt more secure if the superan was paid into a specific fund but that’s not how it rolls.

This is very helpful thank you.

Is it 300-400k each or for a couple? I fear the answer is each??

Where can I find all these jobs with private pensions?!

I’m self employed so only have my own investment ISA that I’ll use as a pension + state… No amount of amazing saving is going to give me the return many of these private pensions do… I think I need a career change!

Any advice from those that were / are self employed to best save for retirement?!

@daysfilledwithdappledlight I am currently self employed, but formerly in a salaried role. Any salaried job will have pension benefits by law, some much better than others. Same as any other kind of benefit (vacation? Sick leave?) but the downside is working for someone else and all that entails - only you can determine if the treads off is worthwhile. When I had an employer, more than 20% of my nominal salary went to pension with employer contributing 8% iirc. It is much harder to build a pension when self employed as it is all on you. I try to contribute to my pension once per quarter now, and focus on the tax savings to motivate higher contributions (I can put £5k of income into pension which turns into £6k immediately or pay an extra £2k in tax this year that I will never see back). I add less as a self employed person than as an employee, but as long as I keep making contributions I feel like I will be okay.

I'm 35 and desperately hoping (though I doubt it) that there's a state pension when I retire.

I think we'll need the equivalent of £30k in today's money. By the time I'm 67 though our DC will be aged from 37-44 so hopefully will have been completely independent for a number of years. DH is 4 years older than me though so I'd like to retire a little earlier than 67.

When looking at a job offer now you need to look at the whole compensation package, not just the headline salary. Price up the employer's pension contributions. Some companies pay in significantly more than others.

Saving for a pension is a long game. In a way it's a bit like your mortgage. At the start, the amount you are paying in/paying off seems pitiful but year by year you keep chipping away.

I'm now at the point in my career where retirement (and finally paying off the mortgage) are on the horizon. My pension won't be amazing but should be sufficient for DH and I to maintain our current modestly comfortable lifestyle: a European self catering holiday every couple of years, one car, being generous hosts at Christmas. Our hobbies aren't hugely expensive (allotment and sewing).

At 25 my current retirement plans would have seemed both unattainable and dull. At 57 they now look both attainable and desirable!

We were both teachers. Not a well paid job as graduates with degrees that could have given us higher wages. We worked very long hours. It’s a rewarding job and pensions are reasonable. We did have to pay a large pension contribution each month for 35+ years.

I’ve been self-employed for 25 years, before that I was employed but never in a pension scheme (thanks, patriarchy!). I opened a private pension with Barclays in 1989 when I was 27, and paid £210 in every month, without fail, until 2021 - by which time the fund was valued at £300k. Since then I’ve paid in a bigger chunk but kept up that regular monthly £210, and moved the fund to a SIPP - though actually I think it’s a bit costly on fees, as I near retirement I like to have more control and the original scheme was very inflexible.

ISAs are good because interest/dividends/gains are not taxed over time, and when you take money out in retirement, it’s not taxed.

Arguably, paying into a SIPP is better because the SIPP immediately claims 20% tax relief (so my £210 has been added to with £42 from the government each month), plus you get another 20% tax relief via self-assessment if you’re a 40% taxpayer. In retirement however, what you draw down from your SIPP over and above the 25% lump sum is subject to income tax.

i don’t know how old you are, but my experience tells me that if you stay self-employed and you pay in regular to a private pension/SIPP, it’s worth it. Good luck.

Yes I agree. I had thought that the Labour plan to reinstate it was just a knee-jerk headline following the budget that had been quietly dropped once thet thought it through. But this headline yesterday https://inews.co.uk/inews-lifestyle/money/pensions-and-retirement/labour-headteacher-pensions-protection-2890461 makes me think they are planning to bring it back. It seems there will be exceptions for 'crucial' public sector workers but presumably not for those who are 'dispensible' in the public and private sectors.

It depends what lifestyle matters to you. I’m not interested in holidays, nor going out for meals, coffee, theatre etc, I don’t go shopping other than for groceries. I can live very frugally but in this rural location it would be difficult if I couldn’t run a car, and lonely if I didn’t have my dog. There’s a bit in the bank in case the boiler or the roof need big spends, my credit cards are clear and kept for emergencies, I am warm enough, the freezer is full, I have everything I need.

I could not find a way to spend £25k a year, let alone £100k upwards - well, I’d get a painter in, and I could have a new kitchen and bathroom and flooring and windows, but I don’t NEED them!

I wonder if many well-off grandparents use pension income to pay school fees or invest for their grandchildren?

Our target as a couple is 60k net a year + state pension (I see it as a bonus as who knows how much it will be when we retire - early 40s now).
This would allow us to maintain our ‘comfortable’ lifestyle.
We are saving all we can though, this is the minimum target. Halfway there, we started late but are putting aside 70k a year now.