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

Yea when I was in my 20s retirement seemed so ridiculously far away I never thought about a pension.

At 35 when I got shown the maths (namely how many years I'd added to my working life) -- to say it was gutting was an understatement.

The funny thing is loads of people told me to start thinking of a pension when I was in my 20s -- but I thought I was being cool or cocky when I answered 'Naah - I need a decent motor - I'm gonna die young anyway'.

Anyway I'm paying the price now -- big style .. with putting in double what I'd have had to -- just to try and catch up ..

It's all the compound interest I've missed out on that really hurts. 15 years compound interest of 7% annual, on just a £100 pension contribution at age 20, -- I would have had £257 in my pot at 35 -- and remember the £100 contribution is tax free! I only would have had to pay £78 out of my back pocket.


:(

Every £78 turned into £257 for free (and that's just the first 15 years of investment - the final figure when I retire for my £78 I put in would be £2000!!!! Honestly! in the bag for giving up £100 aged 20 ..! (retiring at 65)) -- but nope -- I'd proudly tell everyone I'd rather spend the money on beers :(
It's all in the maths -- just start the thing early honestly -- take my word for it!
 
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I am 20 and have moved to the UAE for work, never paid any tax, how do I go about paying for my NI and how much will it be a month?
 
NI is 10% I think.

I personally wouldn't pay it if you don't have to .. state pension is going to be worth £1.70 and a bag of chips (per month!) by the time you're old enough to claim ..
 
britboy4321 said:
:(

Every £78 turned into £257 for free (and that's just the first 15 years of investment - the final figure when I retire for my £78 I put in would be £2000!!!! Honestly! in the bag for giving up £100 aged 20 ..! (retiring at 65)) -- but nope -- I'd proudly tell everyone I'd rather spend the money on beers :(
It's all in the maths -- just start the thing early honestly -- take my word for it!
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I always rember been shown a chart when I was 20 and started my pension which showed that if you wanted two thirds of your final salary at retirement then the contributions weren't too bad at 20 (10% monthly salary from memory) but by the age of 40 you would need to put more than half your monthly salary into your pension to have that at 65 :eek:

The younger you start even if it's only £20 per month, the better it is.

My dad started a life savings with profit investment when I was born in 1968 which he paid £11 annually. I took over the annual £11 payments when I was 18. When it matured at 40 last year they paid me out over £6000 which wasn't bad for £440 of investment!
 
britboy4321 said:
It's terrible really. £500,000 saved up? Have £1K a month ....
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My old boss used to say pension funds were worthless if you didn't have at least a million in them (easy for him to say when he had £3m in his 10 years ago :rolleyes:)

The reasons your monthly amount is low is because of your wish for your wife to still get paid after your death and your early retirement age of 55 (and having it indexed linked). Already today you are expected to live to 78 so your annuity will be paying out for 23 years compared to the 20 years you have been paying into it. Add the fact your wife is expected to live another 4 years longer and both of you will live longer as time goes by so in another 20 years when you are 55 you may well be expected to live for 27 years and your wife 31 years if the trend keeps going. £500,000 paying out £1200 per month over 31 years indexed linked doesn't seem that bad of a return if you look at it that way. Non indexed linked and none for your wife would get you another £1000 per month giving you £2360 per month from your £500,000.

That is why people are expected to work past 55 now as if you try to aim to retire at 55 you may have as long to live as you have actually worked so difficult to have paid enough into pensions/savings to live in comfort for that long.

Delaying your retirement by 5 years to 60 and not paying anymore into your pension would get you another £400 per month alone.

Unless you are very successful financially in life, the dream of retiring comfortably at 55 is beyond most people. 27 years is a long time to fund without working. My inlaws managed to retire at 55 but she had a final salary work pension which paid her 2/3rds of her final salary as a director of social services (so well paid I guess) and they sold their house and moved to Greece where the cost of living is much cheaper. Even then they have to be careful with money if they want it to last.
 
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To get a pension pot worth 1,000,000 (2K per month to me when I retire at 55) -- at my age -- I'd have to increase my contributions to ..

Wait for it ...

£4120 PER MONTH!!!!

And yes, you did read it right! £4120 per month -- out of my back pocket -- thanks very much :(
 
britboy4321 said:
To get a pension pot worth 1,000,000 (2K per month to me when I retire at 55) -- at my age -- I'd have to increase my contributions to ..

Wait for it ...

£4120 PER MONTH!!!!

And yes, you did read it right! £4120 per month -- out of my back pocket -- thanks very much :(
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Yet if you had started it at age 20 only 15 years ago then only £2380 a month :eek:

But more to the point with inflation and the early investment growing then to have double the monthly income that your £500,000 pot would get you starting now you would have only needed to have put £1000 a month away from the age of 20. Still a lot but £1000 a month investment give you £2310 a month indexed linked on retirement isn't too bad.

Still more to the point is that about £500 a month from aged 20 would give you the same pension as you having to put £2000 a month in now.

As a rough reckoner they reckon that for every 10 years you delay starting your pension you need to put double the monthly amount in.
 
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LordSplodge said:
*checks his Public Sector final salary pension*
*Checks retirement age*

Sits back and tilts his chair.

Sometimes I hate working in the public sector. Sometimes I love it.
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I can't see that public finances or public opinion will allow it to continue forever though unfortunately
 
booyaka said:
commercial property only - not residential mind you
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Blame Gordon Brown for that one. you can get Residential Property Unit Trusts and stuff like that, there are ways around what can and cant be included. My SIPPS contains all sorts of wacky stuff. Just get a Financial Advisor to go throught the loopholes.
 
Rotty said:
I can't see that public finances or public opinion will allow it to continue forever though unfortunately
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A shame really as that was part of the compensation for working in the public sector.

I used to work for Customs & Excise. The pay was well below what you could get in the public sector but the final salary pension and 45 days holiday and 36 hour working week compensated for it. If you viewed that you were getting an extra £500 to £1000 a month in pension contributions if you had to make them youself then your salary was quite good.

If they remove the pensions due to public pressure then they will have to raise salaries to compensate.
 
Solaris said:
Kicked my pension off at 18 years old, 22 now. Only a measley £160 a month going in there but its better than nothing right?
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I wish a lot I'd done the same.

You'll get to aged 35-40 -- and all your mates will start saying 'oh no oh no oh no' as they realise they're due an old age of total poverty, cutting the heating off during winter because they can't afford it etc ... unless they put in thousands and thousands to try and catch up with people like you ...

I know -- because I am one of those people ..
 
Solaris said:
Kicked my pension off at 18 years old, 22 now. Only a measley £160 a month going in there but its better than nothing right?
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Very good. That will get you £431 a month indexed linked at 55 or £921 a month at 65 even if you never up it.
 
Rotty said:
I can't see that public finances or public opinion will allow it to continue forever though unfortunately
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I agree. I've been in the Public Sector for many a year now and although new people don't get entry into the final salary scheme it is still a big burden on Government finances. I very much doubt the Unions would let them take it away from people like me who have been paying into it for many years though.

As Charlton Heston would say: "Out of my cold dead hands"

Greebo said:
A shame really as that was part of the compensation for working in the public sector.
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Exactly. I could earn a lot more in the private sector. However I like the pension scheme (as well as a few other things such as understanding my health problems).
 
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