Pension help

[pinotschmino]

I'm self employed and currently have £16k in a Lisa account and £5k in an old work pension.
I hope to be mortgage free in ten years (I'm 42, will be 52). I am just starting to save £500 a month in to my pension but no idea what I will have come retirement age, can anyone tell me?

More info needed!
Is that £500 via a work pension, or £500 from your own pay packet into a private / personal pension?

It sounds like the latter so I’ll run with that...

If you’re a basic rate tax payer, the pension provider will automatically add 25% pension tax relief, so that’s £625 you’re saving into the pension per month.

What retirement age are you taking about? State pension age or earlier?

Try using the Which calculator:
www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/overview-of-options-for-cashing-in-your-pension/pension-calculator-how-much-money-youll-have-a1jxm4d809k8

It assumes 6% growth per year, but 2% inflation eroding your money too. It also assume a 0.75% annual fee.

If you put in £500 a month from age 42 to age 67, as a basic rate tax payer, it projects about £210K.

It assumes that would give you an annuity of approx £7K per year - though that’s not the only way to take your money.

Nothing is guaranteed, but playing around with than calculator will give you an idea.

I didn’t add in any of your existing savings, and it doesn’t include state pension.

You could try using a Pension Calculator: www.moneyadviceservice.org.uk/en/tools/pension-calculator

You could make a guess at the returns on the pension... 4% would be conservative. Then calculate compound interest over the period of time... you may not get pension access until age 58 and you may not want to get it then. Once you have the size of the pot known, then you could look at taking out of it at say 3.5% per year.

The LISA is not accessible until age 60, so hard to know how much that would increase by over the next 18 years. I would make sure it is invested in as high a risk fund as you can tolerate.

Old work pension - get the details about that to see if it's worth moving it somewhere cheaper. It may be a Defined Benefit pension, so make sure you know what type of pension it is, as well as the current value, the current costs, the fund performance.

There is no easy answer, you simply do not know what something will be worth in 20+ years time. The calculator linked may be a starting point in getting a rough idea.