Is it normal for my pension income to exceed my salary?

[Oldtowel]

I recently worked out my pension (combo of state, private and work) is worth £57,000 a year. This might not sound like a lot but I currently earn £45,000 a year. It struck me as strange that my pension is more than my current salary. I started my private pension in my early 20s and am now mid 40s so have been contributing a long time.

Everyday currently feels like a slog and the money doesn’t go far. I am working hard on trying to increase my income but not making much progress.

I am still 20 years off retirement so there is still hope for progression but at the moment it seems so strange that I have to wait for retirement to be better off.

Am I doing it all wrong and putting too much money in my pension pots? Or am I deluded and this is actually a measly pension?

Is it £57,000 income or is the £57,000 the value of the pot?

I have a healthy six figure amount in a pension pot which will give me around £25k income when I return.

Hi2u Nurses’ and teachers’ state pensions are often reduced because as government employees the government took some of the money that should have gone towards their state pension and put it directly into their occupational pension instead so the staff paid reduced state pension contributions. Although public service staff seem to have generous pensions this is often at the expense of a full state pension. I am in this situation - now retired.

I take it that is gross, and you'll have to allow for 20 years worth of inflation. In the last 20 years inflation has doubled - what you could buy with £1 in 2005 you would now need £2. £100 in 2003 is now equivalent to £205

Who ever gave you pension advise seems to have done you a very big service.

I used to work in benefits and had woman come in with work place pensions of £45 a month.

ChatGPT

doesn't even know what day of the week it is

My local gov pension prediction is about the same, a significant amount compared to my salary now. When I won’t have mortgage, nursery/childcare fees to pay. But I will allow me to retire earlier for a lower amount but still comfortable so I keep paying. My husband is 9 years old so if I waited to retire at 67 he’d be too old for us to potentially enjoy retirement together.

How have so many people missed that OP said that they think their £57k per year pension income doesn’t sound like a lot!? Why is everyone quoting the poster who asked if OP is taking the piss as if they think it’s not much. It’s literally the OP who said it doesn’t sound like a lot

That poster isn’t being a bitch, they’re asking if OP is taking the piss by saying £57k per year pension income “doesn’t sound like a lot” because surely anyone would know that it is in fact a lot

Op was probably pre-empting nasty comments. God knows there are enough on these pages.

You think people would have told OP her £57k pension wasn't much? Much more likely she'd have been told to read the room and not post about how rich she is- that's what normally happens to anyone who posts on here while financially well off, and very tedious it is.

Presumably those amounts are "what you will get if you continue contributing at the current rate for the next 20 years" so you do have the option to NOT contribute at the current rate for all of that time.

You will probably need professional advice to do the sums for you, but I suspect that you could go into semi-retirement in about 10 years, keep working at 50% but start drawing your private pension, so your income remains steady and then you retire the other 50% of the way when you hit actual retirement age. Your income will then NOT go up to £57k but should stay at a level where you can live OK.

The £57k will be assuming steady growth in the markets and of course the markets could crash and burn but it's normal for private pension funds to gradually transfer your fund from higher-risk but high potential reward into more stable bonds that are unlikely to crash, usually spreading the transfer over the last few years of your working life because selling the whole fund all at once to transfer to bonds could affect the value significantly - so if you are likely to want to make any kind of early retirement plan you will need to set wheels in motion with plenty of notice.

It’s better off at retirement age - not right now and in 20 years £57k a year could be peanuts. Keep slogging ❤️

The £57k includes state pension.

Not from her DC pot.

You have misunderstood the post you quoted. They were quoting something that the OP said. The exclamation mark and the question straight after about taking the pee shows this.

That will mean a very comfortable life if you have paid off your mortgage. We get £45k between us and manage to save £2k per month (though it periodically goes on the children and grandchildren!).

I did apologise earlier for misunderstanding that poster.

I also said “it might not sound like a lot” because I am used to people coming on mumsnet and complaining about their “low” salaries of £80,000. But yes I agree £57,000 is definitely a lot.

I am a little surprised that you have accumulated such a pot without appearing to know/notice that you have been contributing significant amounts? Very well done you! But surely it was a decision that you consciously took every year? And it must have been a significant part of your salary each year assuming your current salary is not significantly less than you have earned in the past?

At the moment, it seems you may run the very unusual risk of saving 20% tax on your contributions, to pay 40% tax when you take it out?

@flapjackfairy is quoting you back! You said ‘This might not sound like a lot’ and this poster is asking if you are taking the pee, because it is a lot!! So she’s saying the opposite of how you have understood it!

No one is saying that!!!

the op said in her own post that ‘This might not sound like a lot’. The poster who said ‘this isn’t a lot’ was quoting back at her!!

Not one person has suggested… other than the op… that £57k per year is not a lot!

The fact OP won’t tell us/doesnt know if it’s DB or DC or tell us the pension pot values indicates to me she is either stringing us along (“oh 57k isnt a lot”) or doesn’t understand her pensions. Her numbers don’t stack up.

I have already apologised to that poster earlier. I also explained that I do think £57k is a lot. Please read my earlier post.

I was surprised at the accumulation but I do know I contribute a lot per month. I would like to scale back as I am struggling with COL. However it’s probably good to think about the future.

yes I cant see how anyone could think a pension that size is a modest one so I was expressing my incredulity by quoting the OP.
I can see how it sounded ambiguous now.
So to be clear I would be over the moon to have a pension paying that per annum. Mine will be nothing like that !

It’s true I don’t really understand a lot of elements of my pensions, hence the post! I am definitely no expert. However I did listen to advice and start a pension at a young age so I am not completely clueless.

Yes my apologies for misunderstanding.

Your husband is 9 years old?
MN never fails to surprise.