Just worked out DH and I have 56k in pensions(joint) at age 34 - is this low!?

[theapli]

Sorry if it seems like an obvious Q to some, but we are no clued in on finances (to our own detriment I'm sure) but this is our current pension balance at 34 years old, about 50/50.

Is this bleak? Do we need to up our contributions majorly?

Probably low. You really need proper advice rather than mumsnet.

On the other hand the way things are going retirement age may be a long way off for you. If they increase it much more you may have lots of time to build it up.

It's low but you've got a lot of time to add to it. Ours is the same.

I think it's about average for your age, and a lot of people will have less - I know I do.

The reality is a lot of people on average or below average wages will not be putting much in their pots unless they have employers who contribute more than the legal minimum or if they have a public sector pension. And let's face it, pensions are just not a priority for people in their 30s who have mortgages/rent/bills etc etc to pay.

Speak to an IFA not Mumsnet. You'll get conflicting advice on here. We were late 20's when we got financial advice, now in our 60's and facing a comfortable retirement because of planning done early.

You really need proper advice rather than mumsnet.

Hell of a lot more than me.

Try a financial advisor if you want to make a proper plan ?

I think.it is on th low side but you have plenty of time to up your payments. Money invested when you are younger gets more of a compound effect. Is it in a work.pension or Sipp? If a Sipp the more you put in the more government top ups you get.

Yes it is low.

As a rule of thumb, contribute a percentage of earnings equivalent to half your age when you started, on average.

So if you started contributing at age 18, you should aim for 9% over your life of contributions.

Get some forecasts done now and work hard at contributing sooner rather than later ... compound interest effect is worthwhile.

Assuming you are talking total fund value it is pretty low but the good news is that you have a lot of time to increase it.

Do you have any long-term plans, as in do you know when you would like to retire (ignoring SPA)?

Make sure you keep sight of your own pension and don't just treat it as a couple. Sorry to be bleak but lots of women end up facing poor retirement because as a couple they had good plans, but divorce etc left them alone. Sure pensions can be split in divorce but it's often more expensive and difficult than you anticipate. On a more positive side, if you're a couple, it makes sense to use both people's tax allowances at withdrawal.

What is your pension like?

The issue with asking these kinds of questions on MN is you will get lots of 'well I have nothing' answers that will give you a false sense of security. It isn't a lot.

You can look online to see how much you might want to save for your pension. The assumptions are based on you being retired for 25 years. So if you think you will need a salary of £10k each (in addition to your state pension) then roughly you each need to save £250k. That doesn't include investment gains.

Assuming you retire in 30 years, you each need to save around £8000 a year. Assume some investment gain there and you could reduce that to £5000 each.

You really need to sit down and work it all through.

Wow I don't think we have 8k spare each to put into a pension every year.

I am hoping one day we can pay off the mortgage early and from then on everything can go into the pension.

I'm guessing one day we'll get some inheritance which can go into the pot too.

Seems mad that we have to save so much for a pension pot from such a young age!

Re my personal pension, I have about half of it, so about 28k.
DH earns double me but he started contributing to his later, but his will grow much quicker than mine.

OP look at Rebel Finance School, it's free and has a really good personal finance course on this exact topic. Highly recommend.

The thing is, if you wait until paying off your mortgage to up your pension payments then you're limiting the time for compund growth. Over time a well invested pension should have higher returns than mortgage interest. Think about pension payments as part of the finanical mix now, it'll be much more expensive the longer you leave it.

@Mia85 thank you

Will do

If you contribute via salary sacrifices it won’t feel directly like you are 8k out of pocket as the money is taken before tax. No idea how much you earn but for example, if you earn 50k your take home per month is £3230. If you contribute 8k yearly via salary sacrifice, your taxed take home pay is £42k, so £2764. That’s £466 less a month in your take home pay, but £8k per year straight into your pension, which has years to grow. You will also earn more child benefit too if this is reduced due to higher earnings

Its a start and you have time to work on it. A good pension might increase in value by about 7% pa, so in 30 years, if you contribute nothing more, and just have pension fund giving 5% it'll be worth £230k. You'll need about £800k between you for a good retirement fund, on top of the £11ish K you'll get each as your State Pension - if you keep up your NI contributions.
Martin Lewis says to half your age when you start saving to get the percentage of your income you should contribute, so if you started from scratch now you would look at saving 17% of your wages. You've already started, so you can reduce the percentage. If this is unaffordable, then just invest a smaller percentage and increase when you can. The key is the earlier you start to save, the less you'll have to pay, because of the cumulative interest. Remember also to have it deducted at source, before you pay your tax.

This, also you can withdraw 25% of your pension fund tax free at 57, which could go towards paying off your mortgage (although of course the age which you can do this or the tax free rules may change)

Thank you everyone that makes so much more sense, really appreciate the responses.

Also, make sure you have completed and signed the correct beneficiary forms with each pension provider you have a pension pot with (this is separate / in addition to a will and needs to be done so you can inherit if something happens to either of you)

ONS say the median average pension pot for 30-39 year olds is under £10k, so you’re doing better than most at only 34! Even at age 64 the median average pension pot is only £107100 in the UK…

Sure and steady wins the day with pensions. Keep contributing what you can, keep an eye on employer contributions and performance etc, but weigh this up carefully against paying down the mortgage and having accessible savings. Although pensions are really important, they are tied up until 55 at the earliest. Plus it’s important to live your life today, not when you’re old and crusty (like me!). Remember, the pension industry want your cash now so they have years of fees to earn from it before you see a penny. Spread your risk and returns.

Its low but depends how much you’re putting in? How much are yours and your employer’s contributions? I consider mine to be low at £50k and my DHs is similar so together we have about £100k at a similar age, but between my and my my employers contributions £10k is added every year and similar to DHs so growing fast.