Really naive workplace pension question

[treebees]

I work part time. I pay in £72.60 to my pension, my employers pay in £43.56, so a total contribution each month of £116.16.

I've been paying in for a year, and will be 67 in 19 years time, so there will be 20 years of contributions.

The online calculator on the pension providers website says I should get £56.00 a month pension.

How can this be right? It says that the average person claims a pension for 22 years, so if I'm average, I'll be getting our way less than paid in!

I always assumed I'd get back more, with the tax breaks and (in theory!) interest.

Is this not the case? Because it looks to me like I'd be better just saving the money and my employer (a charity) not paying into it!

Is there something I'm missing?

Thanks

When you reach a certain age ( read your pension T&C's) you can take a percentage tax free

You don't have to buy an annuity any more

I believe that you can take all the money & spend it, in the future

No bank account is currently paying much interest, you will struggle to get 1 percent
So your employer contributing X per month, plus compound interest is pretty good

The only downfall is that you have to wait a long time to access the money

Does that help ?

Your contribution is tax free so you’re actually paying about £58. The reason it’s relatively low is because you started contributing 20 years before retirement, most people start occupational pensions when they start work.

Plus compound interest over the years of saving

@Alsohuman the contribution is not tax free. A contribution can get tax relief depending on tax status. It would therefore increase the contribution not decrease it.
OP go have a look at pension advice website or if your over 50 pension wise.

Thank you for all the comments. I do have another pension from the previous 20 years employment, but that's set to pay out £200 per month at 67.

Just doesn't make sense to me, I'll have a read of that website, thank you.

Look on the website at the assumptions that they make. What they are showing you is probably a future amount but at the current value (with inflation stripped out). It is too difficult to explain here, but their website should do a better job than I can. If they don't though Ill give it a try! K

Actually Krieger that might make sense, I'll check the small print, thank you