How much will your monthly pension be?

[Amp34]

I can't believe people think this is acceptable tbh.

So your planning on working your whole "healthy" life and then when you hit 70 you could be crippled with all sorts of issues but it's okay as you have will have a bit more money. Not that you will likely be able to enjoy it. The average life expectancy of a male from Glasgow is 70 FYI. So that would be working til death literally.

People should be aiming to retire as early as possible with enough money behind them to actually enjoy their lives. It's a sad state of affairs when people in the UK are thinking like the above, you would expect that in places like Africa and Asia, etc.

They really need to start teaching money management at high school. Which includes pensions, mortgages and the reality, etc.

Welcome to the issues of the "youth" of today. There's a massive gulf between the older and younger generation. The baby boomers and to an extent gen X are quite possibly at the pinnacle of retiring early. Millenials and gen Z are just going to have to live with the fact it's going to go back to the way of older generations. We are going to have to go back to working until we drop in many cases.

The dream of retiring at 55 with a great pension is dead for most young people. The money is just not there any more, and neither are the pension plans/options for us to do so.

You can complain that it's all about money mismanagement but (as much as that may be a small part of it) the reality is living costs have shot through the roof. How is knowing about APR going to help when your acommodation is now twice as much (relative to salary) as it was for the precious generation (the differential going into the previous generations pensions pots), knowing that your generation is likely to earn on average less than the previous generation, knowing that your pension is going to be paid for solely by your contributions, not the final salary pension of the previous generation, knowing that you have tens of thousands of pounds of educational debts you need to pay off, which the previous generation didn't have to pay.

It is a sad state of affairs indeed, but teaching money management not really going to help if there is just less money available.

 

[Spook187]

I started late so going to be a struggle in my later years, i don't think i will live longer than my 50s anyway, hard grafters always die young not like folk who just plunk at a keyboard all day easy life eh, no wonder they never want to retire.

 

[photoshop]

You are either very naive or in total denial. If you honestly think the state pension will allow you to live a semi comfortable life in 30 years time you have too much faith in the system. Surely you want to be able to do the things you do today rather than scrimp the pennies just to buy food in retirement?

Being self employed I will just rely on my savings.
IF i make it to retirement without dropping dead, then i will be mortgage free and free of any debt. Then I think my savings would be enough to live a comfortable life.

I can always do p/t consultancy work for extra pocket money in my retirement as im a civil engineer and i think the demands will get even greater for them in the future (its pretty bad now anyway).

 

[Mr^B]

Struggling to learn of any company putting in anywhere near the amount some of you are suggesting.

My current, last and the one before that had a maximum of 5%. I've asked my friends, all 5%

some of you are way over 10% who are these companies?

FTSE 250 Hedge Fund (7% + 14%)

I started late as I got totally shafted at my previous company, going from a final salary scheme to a contribution one. I had the sum total of £4k after 8 years.

 

[Will Gill]

Absolutely nothing, invested in many bricks and lots of mortar and kind of hoping I'll be ok.

Time will tell I guess

 

[weringo]

Hardly, weringo can't earn that much, £400 a month will give you a more than adequate pension, which is pretty much 40% of minimum wage.

I earn significantly above the average wage but that is not relevant. A pension calculator determines what a "normal" pension would be based on your current income, i.e. what you would need to maintain the same lifestyle.

The point is making 20% contributions (at 27, with a decent amount in the pot already for my age) is projected to hit nowhere near the required amount to maintain your current lifestyle retiring at 67.

 

[glenimp617]

When I said I had no issues working till 70, I didn't mean it purely based on finances. I must be the only person on the planet who likes his job lol

 

[KNiVES]

edit: nvm

 

[Vern1961]

When I said I had no issues working till 70, I didn't mean it purely based on finances. I must be the only person on the planet who likes his job lol

I enjoy my job (most days) but that doesn't change the fact that a 24/7 shift pattern including a week of nights every six weeks, some 12 hour shifts mixed in, plus the lottery of spare weeks (sometimes more nights!) is starting to take its toll on my physical and mental well-being. There's also the possibility the nature of the job could change in years to come, more pressure, busier and there comes a point at which the mental acuity can no longer deal with it and time to move aside for younger, fresher minds.

 

[Puzzled]

Plus if we're all working longer it means less opportunities for the next generation.

That's if we haven't all been replaced by automation of course.

 

[Zatoichi.uK]

Currently paying over £400 pm into my pension which I started over 10 years ago which will apparently get me a whopping 14k per year.

 

[dl8860]

I've tried a few online calculators, and even with what I think is a decent scheme of 14% of earnings going into my Defined Contributions pension, I'm getting some dire results back.

I mocked up a spreadsheet with some forecasts for an annual growth rate of my pension fund of between 3 and 10% (over the last 4 years the fund price has risen by 42% which is roughly a 9% annual increase year on year), and even the 3% is well over anything any of the calculators come back with.

Unless I'm getting something badly wrong, these calculators seem to be far too pessimistic, likely with the aim of scaring you into using more of their services.

I'm well aware that 9% is unlikely to bear out for the long term, and that I haven't accounted for inflation either.

 

[rubberduck]

some of you are way over 10% who are these companies?

Engineering, chemicals sector, and oil and gas all tend to have excellent pension schemes.

 

[KNiVES]

I've tried a few online calculators, and even with what I think is a decent scheme of 14% of earnings going into my Defined Contributions pension, I'm getting some dire results back.

I mocked up a spreadsheet with some forecasts for an annual growth rate of my pension fund of between 3 and 10% (over the last 4 years the fund price has risen by 42% which is roughly a 9% annual increase year on year), and even the 3% is well over anything any of the calculators come back with.

Unless I'm getting something badly wrong, these calculators seem to be far too pessimistic, likely with the aim of scaring you into using more of their services.

I'm well aware that 9% is unlikely to bear out for the long term, and that I haven't accounted for inflation either.

Remember it's in addition to your state pension (assuming you plan to live in the UK all your life) which is another £159 a week.

 

[Amp34]

I've tried a few online calculators, and even with what I think is a decent scheme of 14% of earnings going into my Defined Contributions pension, I'm getting some dire results back.

I mocked up a spreadsheet with some forecasts for an annual growth rate of my pension fund of between 3 and 10% (over the last 4 years the fund price has risen by 42% which is roughly a 9% annual increase year on year), and even the 3% is well over anything any of the calculators come back with.

Unless I'm getting something badly wrong, these calculators seem to be far too pessimistic, likely with the aim of scaring you into using more of their services.

I'm well aware that 9% is unlikely to bear out for the long term, and that I haven't accounted for inflation either.

Have you included inflation?

Stick 2% inflation into your calculations and see what that does.

I just did a 35 year contribution of £5k* a year, with 3% increase and 2% inflation and got about £8330 equivalent spending power a year for a 4% drawdown (£18k with government contribution added).**

With a 5% return you're up to £12,000 a year before government contributions.

That seems reasonably similar to the online one I used earlier.

And that doesn't include any lump sum withdrawal either.

All that said I could be completely missing stuff here too.

*20% contribution for someone on average salary.

** £208k pot for 3% return and £302k pot for 5% return.

 

[The_Abyss]

I've worked as a financial adviser for 7 years and the last 10 years at a specialist pension company, during which time I've been fortunate enough to have good employer contributions and been able to make good contributions myself on top, currently paying in close to my annual allowance.

There's rightly a good deal of focus on the amount put into pensions, but it really is only half the planning. The other half of the planning is how you plan to draw down on your pension and other savings and investments in the most tax efficient manner as you retire. For couples like us, with a reasonably significant age gap and consolidated finances, it pays to look at where and when your future tax liabilities are going to be, especially when the State Pension kicks in, as well as just looking at a number to try and save today.

If anyone's interested in that concept, download the 7IMagine app. I don't work for them but it is one of the better ones on the market, and a bit of an eye opener about how to use your tax wrappers and savings efficiently in retirement, and plan for it accordingly in advance.

 

[dl8860]

Have you included inflation?

Stick 2% inflation into your calculations and see what that does.

I just did a 35 year contribution of £5k* a year, with 3% increase and 2% inflation and got about £8330 equivalent spending power a year for a 4% drawdown (£18k with government contribution added).**

With a 5% return you're up to £12,000 a year before government contributions.

That seems reasonably similar to the online one I used earlier.

And that doesn't include any lump sum withdrawal either.

All that said I could be completely missing stuff here too.

*20% contribution for someone on average salary.

** £208k pot for 3% return and £302k pot for 5% return.

So you're only looking at a 1% annual return in real terms. That's incredibly pessimistic over a period that long.

I specifically stated at the end of my post that I hadn't accounted for inflation. Even the 3% low bound estimate I did is on the pessimistic side for real terms over a long period.

 

[dodg3rman]

I've just turned 49 and had 7 stents put in my heart 2 weeks ago whilst also suffering a heart attack whilst on the table at the time.

Our future planning has always been good so i'm taking retirement next year at age 50 , no question about it. I was going to go on for a few years but this setback has put everything into focus for me and my wife. I have worked a shift pattern that included nights for well over 20 years and this has taken its toll on my health (physically and mentally). I am a fit guy with a pretty decent diet however genetics have played their part.

Sat here with no chance of returning to work for another 3.5 months minimum i've been going through the figures

No mortgage as we paid that off when I was 38 and a significant amount of cash saved up. A reduced final salary pension of £1300pm plus my wife still earning will give us the freedom for me to finish early and still enjoy the same (if not better) lifestyle. We have planned for retirement for a long time but it's just been moved forward , I know we'll be just fine though

 

[NotAGolf]

I've just turned 49 and had 7 stents put in my heart 2 weeks ago whilst also suffering a heart attack whilst on the table at the time.

Our future planning has always been good so i'm taking retirement next year at age 50 , no question about it. I was going to go on for a few years but this setback has put everything into focus for me and my wife. I have worked a shift pattern that included nights for well over 20 years and this has taken its toll on my health (physically and mentally). I am a fit guy with a pretty decent diet however genetics have played their part.

Sat here with no chance of returning to work for another 3.5 months minimum i've been going through the figures

No mortgage as we paid that off when I was 38 and a significant amount of cash saved up. A reduced final salary pension of £1300pm plus my wife still earning will give us the freedom for me to finish early and still enjoy the same (if not better) lifestyle. We have planned for retirement for a long time but it's just been moved forward , I know we'll be just fine though

Glad you're ok, and good work on getting yourself in a comfortable position financially.

Wanting to retire early in a scenario such as yours has meant I've started saving into a S+S ISA as well as my pension, then if something as dramatic as your scenario occurs, we'd have access to the money instantly regardless of age.

 

[dodg3rman]

Thanks , its takes dedication and a lot of compromise over many years so good luck