Am I on track with my pension?

[UmbrellaEllaEllaElla]

I'm 35 and currently my pension is at £43,982.

I currently pay the maximum into my pension which is 7%.

Is this a good amount to have? Should I pay more in when I can?

Thank you!

Need more information
When do you want to retire? What income do you want when you retire?
How much do you earn now - 7% of what? Does that include company contributions?
Are you a homeowner? Do you have a mortgage?

And how long have you been paying in so far?

It feels low for age 35. But not if you only started saving 2 or 3 years ago....

I havent really thought about when. I'm assuming I'll always work in some capacity.

My salary is £47,500 pa. I'd like to be on similar or higher when/if I retire. The 7% is what I pay. And my company pay 14%.

No mortgage (I live with family). No kids.

In my current role about 3 years. Been working since 18 but not always in perm roles.

You can put £60k a year into your pension scheme and qualify for tax relief if you earn that amount. So I doubt you have maxed out your contribution. You need an IFA to do a proper projection and decide for yourself the contribution you should make

I definitely couldn't afford to put in 60k a year 😅

From the information provided, I'm assuming that this is a DC pension and that that is the current value of your 'pot'. Is this your only pension, or do you have others from previous employers?

Assuming that this is DC, a total of 21% a month going in (7% you, 14% employer), is pretty decent. Given those percentages, I'm assuming that you're already paying in the max that your employer will match - if not, look to see if you would like to increase.

This is my only pension :)

I strongly recommend getting advice from an IFA and with their help plan ahead based on your own circumstances.

Hi OP

Ran your numbers into a calculator. If you continued investing at this rate of £9,975 a year into your pension (no pay rises etc), assuming 4% return above inflation, you'd have £725k in the pot when you are 65.

Using the 4% drawdown rule roughly, this would generate an income of £29,000/ year in retirement from age 65. If you factor in the state pension (is that about £12k??), then you're at £41,000 which isn't too far off.

If you're a homeowner with no mortgage to pay by this point, you might feel it's sufficient.

For context, if you could bump it to £12,000 going into your pension/ year, you'd have £840k giving income of £33,600.

If you could bump it to £15,000, you'd have about £1.02m giving income of £40,800.

Alternatively, if you stuck with the £9,975 but waited until age 70, you'd have £935k giving income of £37,400

Sorry this is so nerdy lol & of course, all approximate figures!!!

No this is so helpful! I have ADHD amd struggle with numbers so the way you've broken this down is so helpful. And so kind!

Its not bad in my opinion. Could be better, but could be worse mate.

just keep plugging away at it.

The general rule is half your age as % to contribute at the time you started. But at 21% contributions, that is good. You will catch up very quickly even if you are behind.

Im not much further on from you agewise and due to employers match, I have 12% that goes in. But started age 24. So follow the general rule!

It's not a surprise that at the relatively young age of 35 that you haven't got a clear idea of exactly when you want to retire. It's pretty much impossible aged 35 to imagine what being 60, 70 or 80 is like (just as when you're 18 you can't imagine ever being 35!)

However, sadly our health doesn't stay with us forever so I don't think you should assume you will definitely be ABLE to work forever. What you're doing - paying a decent chunk into a pension and with a company who puts in even more - is therefore a great thing to be doing. If you have 21% total going in that sounds good to me, and better than many.

Also, don't worry about your current pension pot size ... if you worked another 30 years (say) in this job that's 30 x 21% x £47,000 going into your pension fund... that adds up to £300,000 ish plus investment returns. That means really most of your pension is coming from the future not the past ... so don't sweat too much over the past, and instead just keep doing what you're doing in the future :)

I see @anonhop has done some calculations for you which is very helpful. Ignore those that are saying ‘talk to an IFA’ - that costs money and they will only tell you something that can easily be found online.

if you have access to an excel spreadsheet it is easy to do calculations and adjust returns, dates, etc to do some modelling.