What monthly dosh will I get from £500000 pension pot?

britboy4321

britboy4321

britboy4321

Permabanned
Joined
10 Dec 2008
Posts
4,080
Location
London
For the sake of simplicitly I am going to not bother with 'inflation' for this thread. So I'm just going to use 'todays money'.


If I retire with a total pension pot of £500,000 -- after tax approximately about how much money should I expect per month to live off ..? When I actually die, I want my missus to enjoy 50% of whatever I get until she cops it ... I want to retire at 55 -- and finally I want the payments 'inflation linked' so they don't devalue as time moves on ..??

Anyone got a very rough guestimate? At the moment I don't know whether I'll be getting £300 a month or £3000!
 
For a single person pension from age 55 increasing with RPI you are looking at about £1100-1200 per month
 
Of course, if you invest with Equitable Life, you can just see all your money disappear a few years before you are set to retire.
 
In todays money, if you bought an annuity with £500000 at 4% wil be £1,667 a month, add that to the £400 state pension and you will be on roughly £25k a year. You might want to wait until you are 60, because the pension will be worth more and you would probably get a better return on the annuity as well. It will also depend on what increase return you want, whether a fixed monthly income for life, or a set % increase or linked to RPI.
 
Last edited:
I don't think I'll get any state pension as I don't pay NI contributions (it's a long twisted story involving dividends and no salary!)

It's terrible really. £500,000 saved up? Have £1K a month ....

My pension contributions have to be EXTRODINARILY HIGH just to get to 500K (because I started at age 35! Me moron ...)
 
britboy4321 said:
I don't think I'll get any state pension as I don't pay NI contributions (it's a long twisted story involving dividends and no salary!)

It's terrible really. £500,000 saved up? Have £1K a month ....

My pension contributions have to be EXTRODINARILY HIGH just to get to 500K (because I started at age 35! Me moron ...)
Click to expand...


Start paying voluntary NI contributions straight away if I were you, also I think you can pay a backdated amount. The DWP can help you with this. Getting a state pension is a guaranteed income whereas your annuity isnt.
 
daz said:
£500k in a property would net £2.5-3k a month in rental depending on the area (obviously minus taxes and other ongoing costs of managing such a thing..). :o
Click to expand...

Thats a good poinit actually. But I don't think I'd be allowed to buy a property with it .. I think you have to buy an annuity / something with more of a guarantee of income as one of the rules (??).

Basically if I understand correctly the government does not want you to have any chance of going down the bingo and wasting your pension fund then begging them for support .. if you bought a house with your £500,000 -- you could sell it 2 weeks later and chuck the money up the wall ...

The government basically do not let you get your sticky hands on your pension pot personally -- only in some way let you choose to make it so it will give you a regular income while you get old and rusty -- so they definately don't have to bother. Anyone, is this not right?


Might be wrong though ..
 
Last edited:
britboy4321 said:
Thats a good poinit actually. But I don't think I'd be allowed to buy a property with it .. I think you have to buy an annuity / something with more of a guarantee of income as one of the rules (??).

Basically if I understand correctly the government does not want you to have any chance of going down the bingo and wasting your pension fund then begging them for support .. if you bought a house with your £500,000 -- you could sell it 2 weeks later and chuck the money up the wall ...


Might be wrong though ..
Click to expand...



SIPPS allow for property ownership as part of your pension.

http://www.killik.com/financial-pla...at-are-sipps?gclid=COrmrt3yip8CFVoq3godUReVMQ
 
Sorry, I thought if you have private, the public is means tested? And subsequently, you end up with parking change? I'm in my twenties, so haven't given it much thought.
 
Sukh said:
Sorry, I thought if you have private, the public is means tested? And subsequently, you end up with parking change? I'm in my twenties, so haven't given it much thought.
Click to expand...


No the state pension isnt means tested, it is based on your NI contributions.

Start saving for your pension now, if I was you. the earlier you start the better the return.
 
You must log in or register to reply here.
Back
Top Bottom