Discussion
I pay regularly into a Standard Life personal pension.
According to my most recent statement, the "What you might get back when you retire" calculations they reckon my fund will be worth £117,000 when I retire at 65, giving a pension of £3380 per year.
Now I'm no financial expert, but at that rate, even without interest accrued over the period, the £117k would last nearly 35 years (ie, i'll be 100) before it ran out.
Is that right? It doesn't seem like much of a risk for the pension company. If I live to the average age of 84, there would be at least £52,780 left over!
Am I being done/being an idiot?
According to my most recent statement, the "What you might get back when you retire" calculations they reckon my fund will be worth £117,000 when I retire at 65, giving a pension of £3380 per year.
Now I'm no financial expert, but at that rate, even without interest accrued over the period, the £117k would last nearly 35 years (ie, i'll be 100) before it ran out.
Is that right? It doesn't seem like much of a risk for the pension company. If I live to the average age of 84, there would be at least £52,780 left over!
Am I being done/being an idiot?
Remember you don't have to but the annuity from your fund provider.
Check on here
http://www.find.co.uk/pensions/annuities_centre/an...
Interestingly Standard Life are quoting over £7k on here...
Check on here
http://www.find.co.uk/pensions/annuities_centre/an...
Interestingly Standard Life are quoting over £7k on here...
Is Standard Life's quote for a flat, annual single life pension, or does it include annual increases at a stated rate and also what happens on your death, does it continue in some way to a survivor? If these other features are included you'll need to take them into account and this will, obviously, change the results of your calculations so far.
R.
R.
That quote works out as a cost of £34.61 per £1 of pension. It's in the ball park but towards the upper end.
At that rate I'll be amazed if it doesn't include a spouse's pension and full indexation (i.e. increase each year in line with CPI or RPI)
As someone has mentioned above you can shop around for,
1. Better rates for the same type of pension, or
2. Different types of pension. e.g with/without spouse's pension. With/without indexation. Smoker/non-smoker.)
Also: There's a thing called "income drawdown" which enables higher pension in the early years but risks "running out" if you live a long time....
At that rate I'll be amazed if it doesn't include a spouse's pension and full indexation (i.e. increase each year in line with CPI or RPI)
As someone has mentioned above you can shop around for,
1. Better rates for the same type of pension, or
2. Different types of pension. e.g with/without spouse's pension. With/without indexation. Smoker/non-smoker.)
Also: There's a thing called "income drawdown" which enables higher pension in the early years but risks "running out" if you live a long time....
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