How much do you put in your pension?

[psychocandy]

He's got a point there.

*shudder* I need to take a long hard look at myself now! Only kidding PC!

I don't pay into a pension. As an employer we've had to start paying pensions for employees - but we're doing the bare minimum and via NEST so it's not a problem. I have a nagging feeling I was supposed to auto-enrol myself and then opt out, but that seemed like a faff so I didn't do it. I probably should have spent a bit more time looking at the rules, but I find it hard to be interested or excited by pensions so I couldn't be arsed.

I'm gambling my future retirement on my company. Basically, I hope my company is successful enough to provide a pension via dividends, etc. 34 years old and never paid into a pension yet. Some will say it's not the smartest move - I will admit I am ignorant about pensions, but I do at least have control over my destiny. Even if it all goes tits up.

Gills - I think you've been drinking - you agreed with me.

I've got 14 years on you I guess. So you've got £0 in pension? Not even anything from permie jobs?

Fortunately, most of mine has come from that. A few years ago I decided to transfer what I could into my own SIPP.

Know what you mean though. When you're perm it gets done for you or, at least, you dont have to spend any money on it. When you're contractor you need to think about it.

I think this year with the added dividend tax and getting older its been a case of "hang on why am I paying all this extra tax" and should be sticking more into the pension.

[CompulsiveArsonist]

I made some pension contributions when I was previously a permie, not a huge amount though so my pension pot is valued at ~£10k
I would much rather just take the money out and spend it if I could, who knows what government policy will be towards pensions in the future, or if I will even be around to benefit from it.
At the time I retire the state pension age will be 70!

[northernladuk]

17 page thread on the same theme from March here...

http://forums.contractoruk.com/accou...r-pension.html

[psychocandy]

I think 5% is for a level annuity at state pension age. Which means no inflation increases. A 3% escalation (3% a year increase) might be better, in which case you get 3.5%.

4% is a rough rule of thumb for withdrawal in retirement, whether you buy an annuity or not. So decide how much you want to live on, subtract the state pension, and aim to save 25 times the remainder. (Then add in some extra so you can retire before state pension age.)

For example, 20K per year might be enough if you have a paid for house. State pension is 8K. So aim to for 12K x 25 = 300K. If you want to retire at 55 and your state pension age is 67, simplistic calculation is add 12 x 20K = 240K to that, for a total target of 540K.

I think most contractors should aim much higher than 325K. It should only take 10 years to put 400K into a pension. I put 419K in, most of it relatively recently, after 2006 when the contribution limits went up. Current balance is just under double that. (I have stopped contributing from the current tax year so I can keep the 1.25 million lifetime allowance, avoiding the cut to 1 million.)

Fair play nice chunk that. LOT more than me...

Mortgage paid off by 63 at current rate. Looks like i'm in until 67 waiting for state pension as it stands.

Dunno though. Assuming its £8K per person for state pension? Two of you thats £16K per year.

Factor in spouse pension too. NHS one which I reckon would be good for about £5K a year if I remember correctly (but this is 67 if I remember too).

£21K a year. £1750 a month. No mortgage I wouldn't need much more I reckon.

(My daughers 18 when I'm 63 though - might not be best timing!)

[MrMarkyMark]

(My daughers 18 when I'm 63 though - might not be best timing! )

[NotAllThere]

17 page thread on the same theme from March here...

http://forums.contractoruk.com/accou...r-pension.html

Merged now.

I've being paying into a pension since 2004, paid chunks off my mortgage and invested on the stock market. Looking at (with state pension) ~40K per year.

My youngest reached 18 when I was 46.

[ChimpMaster]

<snip>
I put 419K in, most of it relatively recently, after 2006 when the contribution limits went up. Current balance is just under double that. (I have stopped contributing from the current tax year so I can keep the 1.25 million lifetime allowance, avoiding the cut to 1 million.)

£800k then! Sheesh, to think you've locked up all that money until you're an old decrepit man.

Yes, you have another pensions-non-believer here.

I suppose that's what I find difficult to accept - I'd much rather have the money a lot sooner and invest it myself. It's OK if you're earned a massive amount (say £5m) and then 'only' put £800k into a pension... but I'm guessing like most here, the £800k is a big part of your total earnings, which means you have had to sacrifice a lot over the years to save that amount.

[diseasex]

A whooping £0.00.
Nobody can take your cash that is saved. They can however take your pension whenever they want, thats why its "tax free"

[MrMarkyMark]

A whooping £0.00.
Nobody can take your cash that is saved. They can however take your pension whenever they want, thats why its "tax free"

If you mean "saved" in a bank, that's really not true, you are only guaranteed up to 75 K, within one banking group.

[diseasex]

If you mean "saved" in a bank, that's really not true, you are only guaranteed up to 75 K, within one banking group.

Not saying I keep it in cash. Looking at gold atm. Got healthy mix of shares, funds, and little cash except for income that gets invested straight away.

With quantity easing there's little incentive to keep it in bank