Twice your salary in your pension pot at 35

[Mushroo]

I saw this headline earlier from the Telegraph. Is it just me or is that crazy?

Do people really have that much saved up in their pension pot at 35?

Im 30 and don’t even have a years salary saved!

My parents were poor but I vaguely remember they paid the man every month that came round to collect the pension money (it was a very long time ago).

The best thing they ever told me was to save for retirement. On starting work on very little at 16 I did just that and because it was years ago it has grown. My pension wasn't worth much initially but as I got older I always put money into it with the last 10 years throwing as much as I could.

Even if you can't afford much when young don't under estimate compound growth.

I think people look at the trivial amounts and think why bother. But those small amounts will accumulate and circumstances change which mean you might be able to contribute more later.

It's possible to turn things around though. Due to a combination of studying, ill health and jobs with low pension contributions I only had about £10000 in my pot at 34.

6 years in a public sector job and working v hard around the children (including some decent chunks of overtime) and I have a much healthier pension pot

OP

I do but have saved for over 20 years

as a rough guide, a pension pot of £100,000 will buy you an annual pension of £5,000.
Depressing thought.

OP
You have only been paying in for six years and have another 36 years of pension contributions if you work until retirement age. At the age of 30 I probably had one years earnings in my pension.

You have the choice of overpaying to maximise contributions. Also I presume you will earn more as the years go on so your pension contribution will increase.

I haven’t. I started paying in at 21, now 35 and have £63k in mine now. I thought that was decent but I earn £80k so should have £160k? My husband is self employed and doesn’t have any…other than a couple of mortgaged properties so we’re going to be screwed

Now DB pensions are not the norm, it's essential people get into the habit of putting a decent amount away from day 1 of working. If you do that, you never miss it or raise your commitments to the level of your full salary.

There are going to be so many poor pensioners in the coming generations, it's tragic.

Please encourage your DC to start theirs the day they start work.

This is why many millennials and younger will never get to retire. Pension contributions take a back seat when you are trying to make ends meet.

Despite the changes over the years the NHS pension is still generous compared to private pensions. Yet 16% of NHS workers opt out of paying into the pension scheme.

The boomer generation had the luck of cheap housing so in general are mortgage free and able to downsize to unlock funds. But it is predicted that 1/3 of millennials will never become home owners.

It’s a good ambition but very difficult to achieve unless saving into a pension is prioritised and the cost of living increase makes that particularly difficult at the moment.

It's not good to make such seeping age based generalisations

There is a huge diversity in the older generation with many reliant on benefits as well as state pension

There are many younger people with inheritance or good jobs

The diversity between the ages is less than the diversity in any one age group

Pensioner poverty today is all Too real
Not all pensioners are home owners
( although many did benefit from the council house give away that has seriously fucked uk the housing market )

I've got 1.5 times my salary in my pension pot. I'm 43 and I only starting contributing 11 years ago. Once DD gets free hours at nursery and then school, im going to start adding that to my pension, then at 53 I'll have cleared my mortgage so that money will go to a pension too.

It's impossible to save into a pension when young - saving for a house, paying rent, paying mortgage, paying for kids. Whilst on a typically lower salary.

Public sector here, and I just wish the employer paid in 24%. I also wish that the pension scheme hadn't been downgraded a few years ago. I also wish I got paid what my skills would be worth in the private sector, then I could afford to pay in more. But I happen to believe in the work I do, so willing to accept this. But I get fed up of all those people who think we have it great. If it's that great, get a job in the sector. See what you think then...

My employer is part of the local government scheme and pays in 19% while I pay in 5.5%. It's defined benefited so I get a set amount per year for however long I live. I need to stay with them to build it up a liveable amount but in one year I had more than the predicted yearly value from my private sector employer. My private sector employer paid 3% while I paid 3% and I had very little to show for it after 5 years.

It isn't just pension that matters though, its overall assets that you can use. So you might have a tiny pension but loads of equity in a house that you can downsize from to top up your savings, or an ISA that's worth what your pension would be, or various things that give you an income. The calculation also changes depending on pension size as to whether you're better off with money going into an ISA post tax or coming out of a pension that you pay tax on then. No wonder most people haven't the foggiest if they're in a good situation or what they should do.

This is a really stupid question I’m sure, so apologies, and I hope I’m not hijacking the thread.

Im trying to figure out how much my employer contributes. I know it’s 15.8%, but 15.8% of what, my salary or my own contributions?

e.g. if I earn £1,000 and contribute £100 of that to my pension. Would they be contributing £158, or £15.80?

Wow.

This is sobering stuff. As a singleton with mental health issues over the years, I can’t even think about this. I’m kinda saving to get a permanent roof over my head.

I do have several ‘pension intros’; where I’ve started new jobs and been automatically joined to a pension scheme but then have left swiftly and then not added more to each one.

She will be correct - you just don't understand how defined benefit pensions work.

The £70k value will be the notional value of the pensionannuity that he has earned to date. It isn't a pot in the same sense as a defined contribution pension.

This is true. As someone who already lives up north in a reasonably priced house, my downsizing options are much more limited than someone with a property in the south east.

I think for most it's unrealistic. I have about 5 years in a teacher pension (when I was at the lower end of the pay scale and some of which was 0.8). I have 16k in one pother pension and a few hundred quid in another recently started by my current employer (a crap scheme). I'm 36 so not looking great for me

I feel for gens Y and Z. They are fucked unless they come from money or marry it. Even people with good jobs are going to struggle with the things you've listed here

If you are in a defined benefit scheme (whether it's final salary, career average or whatever) I can pretty much guarantee you that it is significantly better than you would get in the private sector.

Those properties won't still be mortgaged when you retire, will they? So why on earth would you claim that you're "screwed" when you have a couple of properties?

I am so confused by my pension. It says annually its worth £20k but the hypothetical annuity cost is around £1m.

I'm late 30s, been paying in for nearly 20 years 🤷‍♀️

I presume its good but have no idea

I agree with Octomore.

I have a very small NHS pension and that will provide a guaranteed amount each year and will also rise each year.

That is so much better than my DC pensions that will be subject to fluctuations with the stock market which recently has dropped by large amounts. Plus with drawdown (not worth having an annuity) you have to manage how much you take out so you won't run out of money on top of any market drop.

I know which one will provide more security in my old age and it will be the small DB.