To find this pension forecast depressing

[Hanhan5]

I thought I was doing really well with c.£180,000 in my pension at 35 and combined employer/own contributions of c.£1000 a month.

I had a forecast statement through in the post today and it suggests based on the likeliest scenario that I’ll have a pot worth c.£600,000 when I’m 65.

I thought it would have been higher and makes me wonder what sort of retirement I’ll have😪

That doesn’t seem right unless you’ve only been working there a year or two.

Exactly - I have worked for the NHS since 1998 and know exactly what my pension will be. It cannot have been a surprise that it is 2k a year meaning you cannot have worked / contributed a lot.

Have they adjusted it to be in today’s money? If so then the actual pot will be a lot higher.

I wouldn’t describe 120k as ‘colossal’ but then I also wouldn’t describe that level of contribution as ‘freakishly high’ either. Depends on where you live and what you are used to, I suppose.

Thinking of it as a proportion of salary is more helpful than weighing specific numbers as 1) better calibrates to lifestyle and cost of living of the individual and 2) it is really difficult to mentally grasp the value of money 30 years in the future where a seven figure pot may only provide a modestly comfortable retirement.

The money supermarket calculator says 1.2 million on those figures at 65

So as not to derail I’m going to make my own thread about my poor pension to get advice. Thank you.

Jeez your pension forecast makes me depressed too. I’m late 50s and have two hapennies and a button to see me through my retirement. 😔

What doe the letter say they have calculated that amount on?
4% growth pa, which is conservative, on that amount with no additional contributions is nearly £600k.

So either the letter is wrong or you've misread the letter

If you continue contributing £12k a year for 30 years, it's £1.3 million.

Yes, agree with this. You might need to read the details for the assumptions, such as growth rate (4%) and based on today's contributions not including future contributions.

Use Chatgpt to analysis or other pension calculators. With 30 years left you have excellent growth potential.

YABU. You’ll have far more than most people. £600k in a pot plus the state pension should give you plenty to live on provided you’ve paid off your mortgage.

How? Unless you opted out or worked for 2 years, a typical nurses salary should work out as £600ish per year for every year worked (Based on bottom of Band 5).

£85K p.a. from a £1m pension pot after the 25% tax free amount is taken out is completely unrealistic. It would be less than half of that.

What a brag post

You need to understand what the underlying funds are that it is invested in. You are relatively young so it should be mainly equities.

As a pp has suggested pension companies frequently express future pension pots in "today's terms" (also known as "today's money" or "real terms"). In fact, in countries like the UK, regulators actually mandate that annual benefit statements use this method.

This is done to adjust for inflation. If a provider showed you the raw, unadjusted future figure (the "nominal" value), it would look massive, and it would give you a highly misleading idea of your actual purchasing power decades from now.

That might have included state pension, I only quickly checked the app to post. It was more than I expected though, and certainly more than I’m planning for so don’t doubt you’re right!

first world problems

It did include state pension. That actual pot estimate is £1.07m so after 25% is £805k, which with a retirement age of 68 would give you an annuity of about £65k today. With £12k state pension, that’s £77k - so not a million miles away from the total £85k that Standard Life is predicting.

Gordon Brown raided the pension pots and others I believe have since. However that’s a good amount.

Mine told me I’d have about £230 a month - I can’t live of that! I’ve been putting it away so need to put more away but I cannot afford to and no fancy coffees, holidays or subscriptions.

There's so many threads like this now

I think this sounds very good 🤣

Two things at play here.

A - A £600k pension pot is excellent and you would have a good quality of life on that.

B - If you already have £180k in there now with 30 years of working left and I assume continuing to make the same contributions or more, then £600k is a low forecast. Thats very conservative growth for that time period. Is your pension pot in a particularly low-risk fund? With £180k in there now, an average growth index fund would bring in well over £600k over the next thirty years so I wonder why the prediction is so low?

Does your pension provider have an app? Mine shows what my pension forecast is at high, medium and low growth (low growth is actually a minus number!)
I’ve got a similar pot and the £600k is the low/no growth scenario, the medium (5% average) and the high (8%) look a lot better!
Worth checking as I think you are worried about nothing

Oh give over

@Labraradabrador I wouldn’t describe 120k as ‘colossal’ but then I also wouldn’t describe that level of contribution as ‘freakishly high’ either.

Lol.