Private Pensions

builder22

builder22

builder22

Soldato
Joined
14 Dec 2005
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what kind of return do you get on a pension plan now?

what kind of money would you have to put in monthly to get maybe £1300 a month back once you retire?
 
As a rough rule you're looking for a pot that gives you about 5% a year returns, so if you're looking for £16k per annum in today's money you would need £320k. Obviously things like annuities and lump sums and what you take where and when will change this. You also need to think about things like whether you will be spending a lot more money early in your retirement as you will still be fit to go on holidays and lead a full social life, that you won't likely be able to do if you live 90+.

An IFA would be a good start to talk things through in detail.
 
This can be useful to play around with to give you an idea (though obviously it uses assumptions).

https://www.hl.co.uk/pensions/interactive-calculators/pension-calculator

With regards to how much it would cost to provide this; it could range from the £320k Jokester mentioned up to £500k if you take varying options (i.e. Cash Lump Sum, Inflation increases, spouses pension). If you want to retire early more like £600-700k
 
Out of interest are company pensions covered by the government? (eg I think bank money is covered to 35 or maybe 70k...)
 
The Craig said:
Out of interest are company pensions covered by the government? (eg I think bank money is covered to 35 or maybe 70k...)
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Depends on what you mean about covered by the government, I don't believe they are protected in the way bank accounts are by the fact that by their nature they're investments so carry a risk with them. But I think they can no longer held by the companies themselves but by third party providers so companies can no longer misuse their employee's pension funds (effectively steal them in the case of the Mirror group for example).
 
Most Pension schemes are covered by the Pension Protection Fund where in the event of a scheme/company going bust will pay out 90% of the benefits you would have gotten (this is capped, but the figure at 65 is something like a £35k pension which most people wont have).
 
The PPF covers employer schemes, not personal.

Personal pension schemes run under a trust deed (i.e. Stakeholders from life companies) are covered up to 90% of the value should the business fail. Note, this is not protecting you against investment losses.

Trust-based schemes have more limited cover - up to the first £50,000 only. Both type sod cover are provided by the FSCS.

The FSCS also provide cover in the event of the individual investment providers failing, up to £50,000, or £85,000 for cash deposits (per banking institution). Again provided by the FSCS, neither offers protection against normal investment loss.

Unregulated investments are not protected however, compensation may sometimes be sought through other routes, notably who sold you the investment.
 
builder22 said:
what kind of return do you get on a pension plan now?

what kind of money would you have to put in monthly to get maybe £1300 a month back once you retire?
Click to expand...

You will pay tax on that £1300, so check you want 1300 and not it plus the 20%.

Also my worry is with such an amount will it actually be worth anything by the time I retire.
Given inflation and govt lies about future cost of healthcare etc.
 
I have a pension but I doubt it will pay out very much. I am trying to work out how much I need to retire when I am 47 next year. I am selling up and will have a size-able sum. My idea is to live off it with a part time job maybe 3 days a week.
 
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