How much should I invest?
As a first step, think about your lifestyle. Would you want your retirement to be as good as your life today?
What would you do with an extra 35 hours a week? A few more holidays perhaps? Days out with the grandchildren?
Don't be forced into compromising your lifestyle because of a low income when you retire. Use our contribution calculator to help you work out how much you are likely to need to invest to try to achieve the income and lifestyle that you want when you retire.
Please note that our Stakeholder pension may offer wider options than those shown in this calculator.
Remember that any money you invest will be tied up until you take your benefits, and that the value of your pension fund may fall as well as rise and is not guaranteed.
Notes
Remember your outgoings may not be as high as they currently are once you reach retirement. For example, you may have paid off your mortgage and you may receive income from other sources, including:
- State pension
To get a forecast of your expected State Pension you'll need to complete a BR19 form, available from your local office of the Department for Work and Pensions, and send it to the Benefits Agency. Alternatively go to the following site (http://www.thepensionservice.gov.uk/resourcecentre/e-services/home.asp). - Employer's pension
Ask your previous employers or their pension provider for a statement of what any pension income with them may be in today's terms. - Personal pension
If you already have a personal pension plan, ask your financial adviser or pension provider for a statement of your projected pension, in today's terms. - Other Savings
If you have any other savings such as ISAs or unit trusts that could provide additional income in your retirement, these should also be taken into account.
Help
Help: Sex
This affects the cost of the pension/annuity, because on average women live longer than men and therefore the cost of buying their pension income is usually higher.
Help: Current annual salary
This should include all taxable salary. You may also want to include any regular bonuses.
Help: Retirement age
You can normally take your benefits from age 55. Also, please note that the minimum term to your selected retirement date for our Stakeholder pension is five years.
Help: Index your contributions
Indexation means that your contribution automatically increases each year either by a fixed percentage or in line with the National Average Earnings Index, which is assumed to be 2.5% for the purposes of these calculations.
Help: Monthly net contribution
Enter the actual net amount you would like to contribute, and the calculator will automatically add on basic rate tax relief at 20%. Each tax year you can make gross contributions of up to 100% of your relevant UK earnings or £3,600 if that is greater, and still get full tax relief. The law and tax rates may change in the future and the value of tax relief will depend on your individual circumstances.
The Annual Allowance for the tax year 2012/2013 is £50,000. It takes into account gross contributions paid by you and any contributions paid by your employer or third parties to any registered pension scheme. In the case of final salary schemes, contribution is defined as the increase in the value of benefits for active members.
If the total contributions to all of your pensions add up to more than the Annual Allowance, you will have to pay a tax charge on the amount paid above the Annual Allowance.
The Annual Allowance will not apply in the tax year in which you die or if you take your benefits on the grounds of serious ill health.
Where the total of the contributions to all of your registered pension schemes exceeds the Annual Allowance in a given year, unused allowances from up to three previous tax years may be available. The Annual Allowance for each of the three tax years before the tax year 2012/2013 is assumed to be £50,000 for this purpose. You must have been a member of a registered pension scheme in both the current tax year and the tax year(s) from which you wish to make use of any unused allowance. If you think this may affect you please contact your financial adviser.
Don't forget that higher/additional rate taxpayers can currently claim back any additional tax relief via their tax return. The minimum monthly gross contribution to our Stakeholder Pension is £20. This means that the minimum monthly net contribution is £16 (allowing for 20% basic rate tax relief for the tax year 2012/2013).
You may wish to seek financial advice on this matter.
Help: Single or one-off net contribution
You may want to start your plan with a lump sum contribution. Enter the net amount you would like to contribute. The minimum single gross contribution to our Stakeholder Pension is £20. This means that the minimum single net contribution is £16 (allowing for 20% basic rate tax relief for the tax year 2012/2013). Each tax year you can make gross contributions of up to 100% of your relevant UK earnings or £3,600 if that is greater, and still get full tax relief. The law and tax rates may change in the future and the value of tax relief will depend on your individual circumstances.
The Annual Allowance for the tax year 2012/2013 is £50,000. It takes into account gross contributions paid by you and any contributions paid by your employer or third parties to any registered pension scheme. In the case of final salary schemes, contribution is defined as the increase in the value of benefits for active members.
If the total contributions to all of your pensions add up to more than the Annual Allowance, you will have to pay a tax charge on the amount paid above the Annual Allowance.
The Annual Allowance will not apply in the tax year in which you die or if you take your benefits on the grounds of serious ill health.
Where the total of the contributions to all of your registered pension schemes exceeds the Annual Allowance in a given year, unused allowances from up to three previous tax years may be available. The Annual Allowance for each of the three tax years before the tax year 2012/2013 is assumed to be £50,000 for this purpose. You must have been a member of a registered pension scheme in both the current tax year and the tax year(s) from which you wish to make use of any unused allowance. If you think this may affect you please contact your financial adviser.
Don't forget that higher/additional rate taxpayers can currently claim back any additional tax relief via their tax return. The minimum monthly gross contribution to our Stakeholder Pension is £20. This means that the minimum monthly net contribution is £16 (allowing for 20% basic rate tax relief for the tax year 2012/2013).
You may wish to seek financial advice on this matter.
Help: Monthly income at your selected retirement date in today's money
To use this area, imagine that you are retiring today. Enter how much income you think you would need to live comfortably, assuming for example that the mortgage is paid off and the children have left home. Alternatively you may wish to enter this as a percentage of your current salary.
Help: Monthly contribution to your plan after tax relief is added to it
This is the estimated contribution to your plan that you will need to make to achieve your requirements in retirement, this includes basic rate tax relief of 20%. Don't forget that if you are a higher/additional rate taxpayer you can currently claim back up to 20%/30% additional tax relief via your tax return. You can contribute, and receive tax relief on, up to 100% of your relevant UK earnings in a tax year, or £3,600 if that is greater. The law and tax rates may change in the future and the value of tax relief will depend on your individual circumstances.
The Annual Allowance for the tax year 2012/2013 is £50,000. It takes into account gross contributions paid by you and any contributions paid by your employer or third parties to any registered pension scheme. In the case of final salary schemes, contribution is defined as the increase in the value of benefits for active members.
If the total contributions to all of your pensions add up to more than the Annual Allowance, you will have to pay a tax charge on the amount paid above the Annual Allowance.
The Annual Allowance will not apply in the tax year in which you die or if you take your benefits on the grounds of serious ill health.
Where the total of the contributions to all of your registered pension schemes exceeds the Annual Allowance in a given year, unused allowances from up to three previous tax years may be available. The Annual Allowance for each of the three tax years before the tax year 2012/2013 is assumed to be £50,000 for this purpose. You must have been a member of a registered pension scheme in both the current tax year and the tax year(s) from which you wish to make use of any unused allowance. If you think this may affect you please contact your financial adviser.
The calculator takes account of inflation in your target pension income when estimating the contribution you need to make.
Help: Monthly contribution to your plan after basic rate tax relief is added to it
This is the estimated contribution to your plan that you will need to make to achieve your requirements in retirement, this includes basic rate tax relief of 20%. Don't forget that if you are a higher/additional rate taxpayer you can currently claim back any additional tax relief via your tax return. Each tax year you can make gross contributions of up to 100% of your relevant UK earnings or £3,600 if that is greater, and still get full tax relief. The law and tax rates may change in the future and the value of tax relief will depend on your individual circumstances. The Annual Allowance for the tax year 2012/2013 is £50,000. It takes into account gross contributions paid by you and any contributions paid by your employer or third parties to any registered pension scheme. If your total contributions add up to more than the Annual Allowance, you will have to repay any tax relief you receive on the amount you?ve paid above the Annual Allowance. The Annual Allowance will not apply in the tax year in which you die or if you take your benefits on the grounds of serious ill health. Where the total of the contributions to all of your registered pension schemes exceeds the Annual Allowance in a given year, unused allowances from up to three previous tax years may be available. The Annual Allowance for each of the three tax years before the tax year 2012/2013 is assumed to be £50,000 for this purpose. To be able to do this you must have been a member of a registered pension scheme in the tax year in respect of which you wish to make a contribution. If you think this may affect you please contact your financial adviser. The calculator takes account of inflation in your target pension income when estimating the contribution you need to make.
Help: Required monthly cost to you
Don't forget that if you are a higher rate taxpayer you can currently claim back any additional tax relief via your tax return.
Help: Lump sum contribution to your plan after we have added the tax relief to it
Don't forget that if you are a higher rate taxpayer you can currently claim back any additional tax relief via your tax return.
Help: Projected pension fund value at your selected retirement date in today's money
This gives you an estimate of your future pension fund value in today's money, taking into account inflation at an assumed rate of 2.5% a year.
Help: Monthly pension income at your selected retirement date in today's money
This gives you an estimate of your future pension income in today's money, taking into account inflation. This will be subject to income tax.