# What percentage into your pension?



## Kerr

Out of curiosity, what percentage of your salary do you put into your pension? 

I'm just looking through my pension just now and doing the maths. Our company has conducted a consultation period and we need to change or pension options. 

The company will put double what I put in, but only up to 8% and they will put in 16%. 

I'm thinking that would be a wise amount and paying more voluntary contributions myself are a little wasteful. It also seems a bit wrong to sit back on maybe 5% given the potential gains. 

Thoughts?


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## iPlod999

For the past 8 years 11%.

Government have moved the goal posts and I now put in 12.5%.

In 2015 my contribution will then rise to 15%. I will then work an extra 7 years longer and received a much lower lump sum and yearly amount. 

Which is nice!


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## LeadFarmer

I think the maximum you can pay in is 15%. I'm paying about 12% but will have to be paying more in soon. Work longer, pay more in and get less back. 

Kerr, start paying in as much as you can possibly afford, as soon as you can. Take maximum advantage of your employers increased contributions.


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## PaulN

If you can put the full 8% just to get the companys extra too. As you get older start increasing the amount you put in... my Father finished putting over 40% near the end of his working life which of course had tax benefits too.


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## Poohbore

I put in 6% and the firm adds 8%. I also get 6x salary as a death policy. Not good for me but my fsmily are covered. I will starting increading my contribution when I hit 50 but cant afford it at the moment.


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## PaulN

It sudenly dawned on me i have no record of my companys contributions on pay slips or P60... Had a quick word and its only shown on my End of year pension statement...

What i didnt know was im only paying 3% and my company 4% im going to slowly increase it to the max of 7% and company contribution of 8%... Im currently losing 4% per year of free money!!!!


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## Derekh929

Kerr think of it this way if you only put in 5% you are losing 3% so in theory you are getting 100% extra for your extra 3% plus likely basic rate tax relief at source 20% and then if Higher Rate Tax payer a furthe 20% rebate on contrutions depending on your earnings level, money tied up but it has to be a fantastic option to take, as for contributions the levels you can pay in are usually far higher than you will want to pay in , but also make sure you have been getting any HRT relief you maybe due as many are not claiming it with ajusted tax codes


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## Will_G

7.5% and the company puts in the same via salary sacrifice which obviously helps them more as they save on the NI payments


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## 333TGX

The common advice is 'half your age' and that is the minimum percentage that should be going into your pension (including any employer contribution), e.g. if you are 40, then you should have 20% minimum going into the pot!


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## slineclean

I know it's not what we want to pay but in years to come , it will only be the money you will get. So any extra you can add will add up over time


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## Dannbodge

I have 15 going into mine atm


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## Exotica

And then find out you've been screwed over when your reach the age.

Channel 4 investigation 

Michael Buerk investigates the pensions crises facing us all. As the cost of living rises faster than many pay packets and life expectancy increases, he asks what your pension is really worth.

He examines how prepared we all are for retirement and hears from industry insiders who say, when it comes to cashing in pensions, some companies are offering their customers poor value for money. Exclusive data passed on to Dispatches suggests this can leave many of us thousands of pounds worse off during our golden years.

Even before you retire there may be others eager to get their hands on your pension. Using secret filming, the programme investigates: how some companies try to 'liberate' your pension early; the standard of their investment advice; and whether they are open about often-crippling tax bills that could seriously damage your nest egg.

With all the pension pitfalls, Buerk looks at the alternatives. Hype around rising house prices means many are looking at property as the savings saviour. Dispatches puts pensions and property head-to-head. Will buy to let and downsizing offer a silver bullet?


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## Kerr

House prices have to fall as they are way too high. 

I haven't had the chance to see Panorama from the other night yet, but they covered the subject. 

Not from a pension view, but the fact too many people were living beyond their means to oay a mortgage or rent. The economy will be far better once they do have free money.


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## Ross

None so far


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## sbrocks

In exactly the same position as IPlod999 who posted earlier in the thread (same job allbeit in N Ireland)....a complete joke, increased payments and extra time to do to receive a smaller pension / lump sum......

Fairly sickening, as the "new" contracts were not what my colleagues nor I agreed to many years ago.....


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## steviebabe0

I am currently paying 8% with the company paying 7%, 15% in total, this is into a new scheme after our old final salary job was stopped, but I do have 30 years into that old one frozen. Cant see much point paying any more in as it has to be used to buy an annuity anyhow


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## PaulN

A cheerful thought guys, but remember if your married and end up getting a divorce, she take half of your Pension.......


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## LeadFarmer

PaulN said:


> A cheerful thought guys, but remember if your married and end up getting a divorce, she take half of your Pension.......


Or you take half of hers?


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## PaulN

LeadFarmer said:


> Or you take half of hers?


Indeed. :thumb:


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## Billigmeister

i pay in 8% i think and they pay in 14%

as others i expect i will pay more and work longer before i get to complete my final 22 years!!!!


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## WhichOne'sPink?

As someone who is yet to put anything into a pension what should I do? It strikes me like everyone just ends up being screwed out of their own money with pensions so would it not be better to invest the money in something yourself?


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## RedUntilDead

WhichOne'sPink? said:


> As someone who is yet to put anything into a pension what should I do? It strikes me like everyone just ends up being screwed out of their own money with pensions so would it not be better to invest the money in something yourself?


seek decent professional advice mate. Wise words which I will heed myself one day. I have two work related pensions which have been frozen for a few years which had a good fews of contributions in them. Every year I get an annual report and neither make any money.
I dont have any spare cash at the end of the month and the threat of no work has been constant for a few years now so I am not in a position to start contributing.
When time and money allow, I will seek decent advice:thumb:


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## zsdom

I pay 5% which my company matches then adds a further 8%

So 18% in total


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## S63

Been reading this older thread with interest as I've started looking what to do with my PPP. Nobody has mentioned the most crucial element of a pension, the annuity, i.e. How you invest your wad of cash apon retirement. At the moment a pot of £100k is going to give you an annual income of approx 4 to 6k per annum, depending on your postcode, health and whether you smoke or not....perhaps I should start again! Although on that pitiful return I doubt I could afford the ****.


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## Kerr

S63 said:


> Been reading this older thread with interest as I've started looking what to do with my PPP. Nobody has mentioned the most crucial element of a pension, the annuity, i.e. How you invest your wad of cash apon retirement. At the moment a pot of £100k is going to give you an annual income of approx 4 to 6k per annum, depending on your postcode, health and whether you smoke or not....perhaps I should start again! Although on that pitiful return I doubt I could afford the ****.


I was given that advice from the company's pension adviser. I've still got over 30 years to go, so possibly not be the case that far forward.

Aberdeen has quite a high life expectancy, his advice was that if you were somewhere like Glasgow, you'd see significantly more cash.

I wonder how much they clamp down on things like that? What's to stop someone using an address for a few months to influence their pension?


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## jenks

zsdom said:


> I pay 5% which my company matches then adds a further 8%
> 
> So 18% in total


Hope your not an accountant dealing with my pension!:lol:

I pay 9.5% company pays 19% into a final salary scheme.
Recently I opted out of the 1/50 th scheme into the 1/65th scheme to stop my monthly payments going up by £100 per month. However I also bought a much bigger house, also thinking to the future, so we can downsize later in life and hopefully benefit from the property market.


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## Kerr

jenks said:


> Hope your not an accountant dealing with my pension!:lol:
> 
> I pay 9.5% company pays 19% into a final salary scheme.
> Recently I opted out of the 1/50 th scheme into the 1/65th scheme to stop my monthly payments going up by £100 per month. However I also bought a much bigger house, also thinking to the future, so we can downsize later in life and hopefully benefit from the property market.


He pays 5%, and the company matches his 5% then adds another 8% I'm sure he means.

5+5+8=18


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## Estoril-5

i pay in 5%, company pays in double, so 10% = 15% total.


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## piston_warrior

5% and then company puts in 11% however in four weeks I'm switching jobs where I get a free pension and they put in 21%. Not too shabby.


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## S63

matthewt23 said:


> 5% and then company puts in 11% however in four weeks I'm switching jobs where I get a free pension and they put in 21%. Not too shabby.


Not too shabby at all, however as I said in my last post it's all about what you get for your money when you come to invest your pension fund.....a £100k pot will give you a small monthly return, certainly not enough to live on, figures of £500k to £750k are illustrated on many sites as a figure required for a comfortable return in retirement....that's a lot of saving over a very long time.:doublesho


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## Geordieexile

S63 said:


> Not too shabby at all, however as I said in my last post it's all about what you get for your money when you come to invest your pension fund.....a £100k pot will give you a small monthly return, certainly not enough to live on, figures of £500k to £750k are illustrated on many sites as a figure required for a comfortable return in retirement....that's a lot of saving over a very long time.:doublesho


I'm guessing from the figures that he may not need an annuity with that particular scheme ;-)


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## S63

Geordieexile said:


> I'm guessing from the figures that he may not need an annuity with that particular scheme ;-)


That all depends on his salary, 21% of say £50k pay over thirty years amounts to something in the region of £300k plus whatever the interest rates in that period of time offer, at the moment almost zilch.

The question is how much do you think you will need to live for maybe a possible twenty to thirty years after retirement?


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## Geordieexile

What I mean is that it sounds like a fixed benefit index linked public pension. Possibly MOD.


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## rob_vrs

Me 7% work 11%


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## piston_warrior

Geordieexile said:


> What I mean is that it sounds like a fixed benefit index linked public pension. Possibly MOD.


Very good  it will be an MOD pension.


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## LeadFarmer

Anyone pay into AVC's (Additional Voluntary Contributions)? I hear its the tax mans best kept secret as theres no upper limit to what you can contribute. And its all tax free.


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## Geordieexile

matthewt23 said:


> Very good  it will be an MOD pension.


Just make sure you take into account the changes that'll take place in Apr 2015.


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## Bero

My work used to have a sliding scale of contributions: -

under 29 yr old - you pay 3% work pay 6%.
30-39 - you 4% - work 7%
40-49 - you 5% - work 8%
50yrs+ when you was you pay 6% work pay 10%.

As of last year it's not based on age - you get to choose your band.



LeadFarmer said:


> Anyone pay into AVC's (Additional Voluntary Contributions)? I hear its the tax mans best kept secret as theres no upper limit to what you can contribute. And its all tax free.


I used to pay £100 AVC/month but stopped due to the changes above, rather than paying an AVC I chose the 6% band. The cost to me is very marginally less - but the value going into the pension is significantly more.

It's no secret, and yes it's tax free and it comes off the top line. So it was only costing me circa £50-60 off my take home. I'm sure there is an upper limit - but it's high enough not to affect 99.9999% of people.


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## S63

After yesterday budget hopefully the annuities will be much fairer by the time you guys retire.


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## knightstemplar

S63 said:


> After yesterday budget hopefully the annuities will be much fairer by the time you guys retire.


By the time some of the younger guys retire you will have to work until you are 85 with life expectancies rising :lol: If you have a private pension payment would that be used if you had to go into an old peoples home or such


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## t1mmy

I pay in 0% and my company pay in 9%.

I'm happy at the moment with the return on investment over the last few years, which has been favourable against market conditions.

Does anyone have any suggestions for good sites that could advise whether or not I should be contributing based on what I would like when I retire?

Also, what are peoples thoughts on property. Would it be better long term to invest in bricks and mortar?

All views are much appreciated.


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## Dannbodge

My company puts in 8 or 10% I can't remember. 
I put in 10% and have done for the last 3 years


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## Jamie!

be clever, the gov't may be claiming you can get 100% of your pension for 0% tax at the minute in the news...but who knows if they'll change that by the time you try to claim your pension?

Stuff it in your mattress like my nanna did then you're paying no tax to the robbing *****. But yeah, I'm 24 and already made payments into my pension and have seriously thought about my pension savings, I don't want to live poorly in my final years, if I live that long of course.


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## S63

Jamie! said:


> be clever, the gov't may be claiming you can get 100% of your pension for 0% tax at the minute in the news...but who knows if they'll change that by the time you try to claim your pension?
> 
> Stuff it in your mattress like my nanna did then you're paying no tax to the robbing *****. But yeah, I'm 24 and already made payments into my pension and have seriously thought about my pension savings, I don't want to live poorly in my final years, if I live that long of course.


As I understand it you can only draw up to 25% of your pension pot tax free.


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## ChuckH

S63 said:


> As I understand it you can only draw up to 25% of your pension pot tax free.


My understanding too.. After that its taxed ...

So by allowing folk to grab the pot they in effect get a lump sum as well...


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## SteveyG

t1mmy said:


> I pay in 0% and my company pay in 9%.
> 
> I'm happy at the moment with the return on investment over the last few years, which has been favourable against market conditions.
> 
> Does anyone have any suggestions for good sites that could advise whether or not I should be contributing based on what I would like when I retire?
> 
> Also, what are peoples thoughts on property. Would it be better long term to invest in bricks and mortar?
> 
> All views are much appreciated.


Your annual statement would normally give an idea of what you're likely to receive per year once you retire. A crude method to give an idea would be to add up the monthly payments from when you started paying until you're 65. Divide that by 30 years and that could be roughly what you get per year for your pension.

I currently pay 10% and work pay 8%, but I'm just about to change my contribution to 15%. A pension pot of £500k is the target.


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## luke-m-j

My estimated retirement date is 2054 so a long way to go yet by since just recently when I took out a mortgage I have been considering either AVC's or mortgage overpayments. 

My pension is a defined contribution where I pay the max of 6% and the company pay 10%

My mortgage is for £112.5k over 25 years on a 2 year fixed rate

Where would say £200PCM be better off?


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## Bero

Jamie! said:


> Stuff it in your mattress like my nanna did then you're paying no tax to the robbing *****.


I'm sure this was tongue in cheek, but a fallacy anyway, if you start stuffing money into a mattress you will already have paid income and NI tax on it!

You also lose out on the interest/growth/appreciation on the money over the years, much worse than putting it into a pension.


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