What if ??

ie If 22 years ago I had simply stuck the 300 per month into a b/ society savings, rather than a personal pension.

My pension pot now stands at 150,000....can anyone please give me an approx figure, compared to the 150k.?

With tax relief, and varying savings rates it's impossible for me to work this out....Thanks.

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Depends on far too many factors to answer your questions, including whether you would have kept moving the money around to get best rates, your top tax rate in each of the 22 years, and how many B.Soc conversions to banks you could have carpet-bagged.

But you would need to have achieved an average rate of about 5.34% pa (net of tax) to have 150k after 22 years.

sensible writes

After 21 years in my Company (final salary) pension scheme, I was offered early retirement, along with all over-55s. The inducement was a 40% enhancement of the "pension earned to date".

If only my Building Society savings had come up with a similar offer. ;-)

This online calculator suggests 5.34%pa net would give more like 148,471.31 :-

"&i=5.34 To get 150,000, you'd need to achieve more like 5.4223385% :- "&i=5.4223385 But anyway - if you had 150,000 in a B/S a/c, you could spend the lot. But if you had 150,000 in a pension, then you'd be taxed on the way out when paid as an annuity, wouldn't you?

In message , Sue writes

Well, you can take up to 25% of your pension fund as a tax-free lump-sum. It's yours to do what you want with. The rest (what you get paid as an annuity pension or as income drawdown) is taxed as income. The good news is that, when you are 65 (actually, in your 65th year), your personal allowance goes up to a generous £9030. The bad news is that there is an also an income limit of £21,800. Above this, your generous £9030 decreases by £1 for every £2 of income above £21,800, until it reaches the 'normal' personal allowance of £5,435.

Isn't around half of that 9030 allowance used up by the basic state pension? And even more is used up by the second state pension?

How much extra pension will you get from a fund of 150,000?

Isn't that like a tax rate of 30% then, on earnings between 21,800 and

28,990?

In message , Sue writes

It doesn't matter which pensions are involved. Apart from the up-to 25% tax-free (which you don't have to take), it's all income to the tax man.

You get the most from a 'single life annuity' (for you only, and it stops when you die. It's about 7% of what you hand over to the pension provider. £150,000 will buy you 10,500pa.

No. See

or

It's me again, sensible. Thanks for all the info.....I'm thinking of taking the 25% of the pot of £150k (tax free), then asking for a cash- only investment, non-risky for the balance. Then taking income drawndown. What would be the maximum I can take annually? Thanks

In message , sensible writes

Income drawdown (unsecured pension) can be attractive if you have a decent fund, and are prepared to take a bit of a risk.

You can take 120% of what you would get for a level single live annuity. This amount is decided by the Government Actuaries Department (GAD).

Here are a few useful links (which I prepared earlier!):

Thanks, very useful answer.