This is not going to be enough to live on is it?

[meddlesomemarch]

Just done a pension estimate and it looks like in 8 years time, aged 67, the total sum of my pensions is only going to amount to £21k per annum. Whilst the house is paid off, this seems depressingly low. Am I being overly pessimistic here?

Financial advisor has said at the age I am now (59), it won't be worth paying into pension but if I have any spare monthly cash to put into AVCs instead.

Whole families live on that.

it’s enough to live on but obviously isn’t what you’re hoping for.

It rather depends on your outgoings and current income surely. If you currently have £100k then £21k will be a substantial drop in living standards. If it’s £40k then not so much.

Our household retirement pot is likely to be around half our current income which I think will be absolutely fine.

Presumably you will be getting a state pension on top of that?

If your house is paid off and so you aren't paying rent or a mortgage I think it'll be fine. Is that including state pension? £21k after tax etc should be just under £1500 which even for rising bills should leave enough that you aren't counting pennies for food. Depends on the lifestyle you are accustomed to though I suppose, if you like eating out every day and have expensive taste and hobbies then it won't stretch far!

Depends a lot on whether you'll be renting or whether you own your home outright.

If you're a homeowner it doesn't seem too bad to me. And I presume this doesn't include the state pension?

No this includes the state pension

Is that including state pension?

On what basis has he calculated it? Annuity or drawdown (if you're in a DC scheme)?

Can you downsize?

Sorry, I see you're a home owner.

Yes you're being pessimistic. That's my entire income and I pay my rent out of that too.

Does this include the 25% tax free lump sum?

Should be ok for day to day expenses, given mortgage is covered, but not for repairs, replacements etc.

You could prioritise getting your home up to scratch, assuming you want to stay there- no unexpected costs of boiler replacements or new roof etc.

Whole families live on that.

If there are children in that family then the 21k is topped up by benefits.

Can't downsize really. The total sum above includes the state pension. I'm not sure on what basis the other pensions have been calculated. They're career average schemes I think. They're two lots of Teacher's Pensions.

Thats more than most peoples pensions. Do you realise that to have an annual pension of £30k you need a pension pot of circa £1m.

Lump sum. The first TP does but the second is calculated as zero lump sum. If I took the lump sum, I guess it would be even less

Of course it's enough to live on. Not enough for a lavish lifestyle but enough if you are sensible with money.

That doesn’t sound too bad to me. Have you got time to boost savings if you think you’ll need more?

It's more than my income for 2 teens and me. And we have to pay rent. So it sounds like loads to me.
But it depends how much you are used to having I suppose.

You've been able to pay off a house and build up a pension like this while current generations compete for 21k/year salaried jobs and have to spend 5x more on a house. You'll be fine.

It's a lot better than most people will get- ignoring the £10k state pension, it's £11k pa which is equivalent to a pension pot of about £400k- I don't think most people have anywhere near that amount- and guaranteed.

If it's not enough, you have to think about your options- downsizing/relocating, carrying on work, lifestyle changes?

Is this a surprise to you? It appears to be. Have you approached sixty and not ever checked before? It is what it is. You still have eight years to add to it.

Many people work part time or seasonally to pay for luxuries like holidays. My friend is a teacher and she does 3 days a week as a teaching assistant at 72

That’s a lot more than I will be getting. I have 4 private pensions. I am 61. All 4 are only worth in total £120,000. One started paying me £100 per month at 60 and I took quarter cash payment of £9,000. Another one with Aviva is worth £40,000 and is only offering me £60 per month, after taking a quarter cash sum, so I’ve left it there in the hope it will pay more in future years. The other 2 won’t pay me out till I am 67, one I pay in £100 per month.

It’s about £1600 a month as you no longer have to pay NI when you hit retirement age, and obviously you’re no longer paying into a pension.

that’s not awful - £500 or so for bills (generous) £800 to live on and the rest for saving for holidays. Can you do part time work to top up?

do you have a partner?

I think this is more than enough.

Many people get that and have rent/mortgage to pay on top.

If you are a teacher you can do supply to top up your earnings if you want to.