Concerned that my pension pot is on the lower end of what it should be...

[hyperbole001]

I'm 36 and have to be honest, I haven't given a great deal of thought to my pension. I probably started paying into one from 2009 onwards, but have had various jobs over the course of my employment history, and until recently hadn't put any effort into trying to track them down. Naively, I had assumed that the govt would be able to do this by simply using my NI number but doesn't seem to be a straightforward as that.

Anyway, from those I've been able to track down and have contacted, I've estimated that my pot is currently sat at around £26k. Does this see on the low side for my age, and should I be consciously trying to increase my contributions?

@StripyGiraffes This is my concern.

That is the big risk compared to an ISA where no further tax can be levied.

But anyone who is saving significant amounts should diversify and save into pensions, S&S ISA and other investments. All of which could be subject to future tax.

@StripyGiraffes

albeit on today’s figures

That's the huge assumption though. And it is huge. Yes, at present, pensions seem like a very attractive investment from a tax perspective. That will usually mean that most people invest a large proportion of money into them. Which then makes them very attractive for Governments as something to hit with taxes, because they'll make a lot of money from it. They've done that lots of times before. That is the big risk compared to an ISA where no further tax can be levied.

But really, what else can I do but play by today’s rules? Yes, I’m diversifying. Done mortgage overpayment even though it doesn’t make financial sense today - because who knows what will happen to interest rates, and your own home is a very comforting investment. Also ISAs, so my eggs are in duffest baskets.

But I’m not going to turn down 40% tax relief on my pension, because an ISA can’t have further tax levied. What if I turn 67 to a future rule that my state pension is reduced £ for £ against my ISA savings?

We can only make the best decisions we can now.

It’s not easy, is it?! 🤣🙈

@Cocomarine no, it isn't. And I'm the same, I don't have an answer, other than trying to "hedge" the various risks (tax rate changes, market fluctuations, interest rate risk etc) as best I can in the way you described: splitting investments across several different things. You can eliminate risk, all we can try to do is mitigate it a bit.

I am mid 30s and didnt start a pension until 30 as was freelance. Should've done. Pot is now about 38k and so I am having to pay lump sums in each year as I can as well as £700 per month and that still wont get me alot. About 100k lump and 25k a year I'm told.

@Newmumatlast

I am mid 30s and didnt start a pension until 30 as was freelance. Should've done. Pot is now about 38k and so I am having to pay lump sums in each year as I can as well as £700 per month and that still wont get me alot. About 100k lump and 25k a year I'm told.

25k a year is decent though... Not to be scoffed at at all

I agree that 25k for 1 person from private pension is excellent. Bear in mind there’s likely to be some state pension too.

£2k to £2.5k per month after tax is generally considered to find a comfortable retirement for a couple.

You might be in the realms of being able to consider stopping a bit early....if you want to, of course.

@Newmumatlast

I am mid 30s and didnt start a pension until 30 as was freelance. Should've done. Pot is now about 38k and so I am having to pay lump sums in each year as I can as well as £700 per month and that still wont get me alot. About 100k lump and 25k a year I'm told.

Wow you must be managing to fill it up at quite a rate to go from a £38k pot to 25k a year plus 100k! Well done!

Yes, I thought it must be a pretty impressive level of input to generate £25k per year. Dont they say you need a pot in the region of £6-700k? Is that achievable in the time? Perhaps it is with employer contribution, tax relief and a generous idea of how the stock market might perform?? To also give £100k lump sum means even more is obviously needed.

The figures of what is needed in a pot to generate £20k or £25k of annual income (especially if index linked for inflation and as an annuity to guarantee payment for life) which will be even higher, show again just how great the public sector defined benefits pensions are, which can regularly generate this kind of level of pension for a worker for earns a solid but not spectacular wage over a 30-35 year career.

@StripyGiraffes - why do you think isas can’t be subject to tax changes
?

Clearly the government could change the ISA rules but up until now they have been entirely outside the tax system. You don't even declare them on self assessment.

@WombatChocolate

I agree that 25k for 1 person from private pension is excellent. Bear in mind there’s likely to be some state pension too.

£2k to £2.5k per month after tax is generally considered to find a comfortable retirement for a couple.

You might be in the realms of being able to consider stopping a bit early....if you want to, of course.

25k including state:/

@WombatChocolate

Yes, I thought it must be a pretty impressive level of input to generate £25k per year. Dont they say you need a pot in the region of £6-700k? Is that achievable in the time? Perhaps it is with employer contribution, tax relief and a generous idea of how the stock market might perform?? To also give £100k lump sum means even more is obviously needed.

The figures of what is needed in a pot to generate £20k or £25k of annual income (especially if index linked for inflation and as an annuity to guarantee payment for life) which will be even higher, show again just how great the public sector defined benefits pensions are, which can regularly generate this kind of level of pension for a worker for earns a solid but not spectacular wage over a 30-35 year career.

Its estimated 100k lump and 25k a year including the state pension though in that 25k a year which is how my adviser worked it out. And that is with having paid lumps in as I could of now a total 25k plus gov 25% (self employed) and having paid £500pcm, then £600pcm and now £700pcm. Not sure that is therefore that good especially as I am main earner and a 40% tax payer. I am told I have a big shortfall as they recommend you aim to draw down 40% a year of your annual income and my income is set to rise more. I personally think 25k a year would be ok depending on inflation as I am not from a high income background so dont feel I need much and could easily live off less than my current income. I also will have paid off my house by then, won't need 2 cars, and won't be making loads of work trips etc so lower bills than currently. They also worked it out on a lower % than my SIPP might generate return wise - though of course who knows the future... could massively go wrong stocks wise. I am just getting into all of this and trying to learn about investing as it wasn't something I was taught at school or that people did. Friends dont. Everyone I know just has basic workplace pension they pay minimum into. Feel bit clueless so reading alot of blogs!