I'm in my low thirties now, and have been paying 13% of my salary (5+8% employer) for 9 years this month. My projection using the VERY conservative estimates from L&G (assume 0.28% growth post inflation of 2.5%, which is ludicrous; current performance is tracking at 6% average per year, with inflation averaging 1.6%, so growth is 4.4%) is that I will be able to get £5,000/year until death, including roughly £72,000 of tax free lump sum. Both are in today's money values. By my own calculation and assuming the same rate of growth and inflation I get about 70% higher than their estimates. Note: when I started I was on the default 'low risk' fund profile; I have in the last few years invested in riskier funds, so the rate of growth is averaging 10%. I didn't take this into account, as growing older I would move the money back into less risky funds.
Considering I'm paying more than the amount I'd be getting back I'd say their assumptions are extremely conservative.
I'm also over-paying my mortgage by about 40-80% a month (depending on other outgoing expenses) so estimate the house to be paid off in 17 years.
The target is for the two of us to have an income of circa £50k a year at least into our late 70s, with circa £30k for the rest of our lives. This is within reach, especially since we'll both increase our pension contributions in the next year, and have just started investing into funds, so will have money outside our pensions.
