Stakeholder pension – is there any point?!

Mudshark, so what was your conclusion about pot size required? What age do you plan to retire?

Well at the moment I’m thinking about a target of £500k, I’ll have other assets though so it’s all part of a mixed approach – also ISAs and the property I live in. It’s all about how much cash I’m willing to put out of reach at the moment.

No plans around retirement age – will be pragmatic about that, currently 20 odd years to go though if mid-60s is reasonable.

There’s quite a good online calculator here:

http://www.aviva-pensioncalculator.co.uk/calculator/new

I use calculations like the ones here:

http://www.thisismoney.co.uk/money/pensions/article-1633402/Pension-pot-calculator-How-need-save-retirement.html

Aviva suggests I need to save £1,570 a month more than I currently do!!!!!

Hmm they’re possible biased though!

Lump sums early on are good if you can do that – more time to grow.

Hmm they’re possible biased though!

I thought the Aviva one was quite generous, must be using more favourable fund growth rates than I’m using in my calcs. It reckons I’m on track for 2/3 final salary, which I don’t believe at all…..

What annual %age growth do you assume? I use 7% so double every 10 years – makes for easy calcs….

I recently did a few pension calc’s and found that a lot of the assessible web based calculators from the big companies varied massively (the Standard Life one as an example).

This one is quite good, but you have to check the qualifications

Money Advise Service Pension Calculator

I thought the Aviva one was quite generous, must be using more favourable fund growth rates than I’m using in my calcs. It reckons I’m on track for 2/3 final salary, which I don’t believe at all…..

Yep, see my comment at the top of the page.

What annual %age growth do you assume?

6%

The problem with pension funds are when there are bad years you get a letter telling saying that your return has been marked down and you should not expect the initial posted return rate. Then after some good years the rate of return is not posted back back up. The money clawed back from good years seems to disappear.

The longer we have low inflation and low growth the lower the numbers used for fund growth get (which is pretty sensible). After all, look at the problems they had expecting the 80s boom years to last for ever and Equitable Life etc. They based their expectations on 10%+ growth for ever……