Using a pension calculator
If you are concerned about retirement and want to investigate how much you income will exactly be when you do so, a retirement calculator can be a great help. If you want to use a pension calculator , you have to provide relevant data such as your current retirement pot , when you plan to retire , your aget , inflation rate, annual retirement income, other income, etc. The calculator will then use a number of assumptions and industry calculations to work how much you might get when you retire .
Important Considerations
A web based pension calculator will always use assumptions to calculate your retirement income and may not therefore be very accurate. A pension adviser will usually be able to give a more accurate pension income estimate because they better understand your position and personal circumstances.
Your retirement income is dependent on a number of personal circumstances, such as your current age, when you plan to retire, if you are married and whether you’re male or female (women tend to live longer). An accurate calculation will also need to consider the type of fund you are investing in, the associated risk factor, likely growth, management charges, adviser fees etc.
Although this sounds complex, any good web based pension calculator will use assumptions but provide a clear explanation as how the calculation has been completed.
In all situations, remember that pension investments can go down as well as up, and that the financial landscape and pension options may be very different when you retire, compared to now. It’s good advice to regulary review your pension arrangements and get an updated pension forecast.
The other income you expect to have is very important for pension calculator . Here you have to consider state pensions, property and savings.
There are a number of pension calculators to choose from. The team at Pensiontracker.co.uk have just released a new pension calculator that not only provides retirement income estimates, but also provides scenarios for increasing your retirement income
Pensions: are they worth it
| It is predicted that a single person’s state pension will be worth just 106 per week by 2012, which will not be adequate considering inflation and an increased cost of living. Now more than ever, it is recommended that you save for your own retirement, since state pensions will become so small they will be insignificant. But how does a personal pension compare with other financial investments?
More than 14bn is invested in personal pensions every year, with tax relief on these contributions being heralded as the main attraction. In fact only a quarter of the contributions will escape being taxed, meaning upon payout, a pension is worth much less than savers might have expected. An average pension pot in 2012 could be around 34 thousand, which would only equate to an income of around 2, 400 per year depending on circumstances. Benefits In 2012 the government will introduce Personal Accounts, auto enrolling employed people into pension plans where they contribute 4% of their income, with employers contributing 3% and the government 1%. The Personal Accounts are proposed to encourage everyone to save for retirement, but if they reduce the income and benefits of low to moderate earners then the effectiveness of this policy could be in jeopardy. Shortcomings – How does it compare to an ISA? There are two types of ISAs, maxi and mini, and you can save with cash or stock market based investments. The perceived value of both depend on how you intend to use the money, through income in retirement or access to a lump sum. Whilst contributions to a pension will create a larger sum, ISAs are available as tax free cash at anytime, whereas pension fund rules say only 25% can be taken as tax free cash. If you are in the higher tax bracket and want access to tax free cash, ISAs allow you to save without being taxed at 40%, and also allows for reduced Inheritance tax liability. |
| Author Resource:- John McE writes on behalf of The Pensions Regulator, the UK regulator of work-based pension schemes. Working to improve confidence in work-based pensions by protecting members’ benefits and encouraging high standards and good practice |
PensionTracker provides free information on pension funds and pension advice
The Four Main Types of Pensions in the UK
Everyone needs to sort out a pension at some point in their life and the sooner you look into the process the easier it is to deal with. One of the first things that confuses people looking into pensions is the different types on offer.
In this article we will explain the four main types which will hopefully help you feel more informed about which option is most suitable for your circumstances.
State Retirement Pension – this is the pension provided by the government, for some people the level of money provided by this pension may not be enough to live off, however almost everyone is eligible for the scheme.
You can begin to claim the pension at the age of 60 if you’re a woman or at the age of 65 if you’re man.
The amount of money you received is based upon you National Insurance contributions, if you’ve been out of work for significant periods of time or under the NI threshold you might need to seek further advice on your entitlement.
Occupational Pension – in the past this was the most common pension people would have in addition to their state pension though with Stakeholder schemes they are becoming far less common.
The pension scheme is set up by your employer for all members of staff who want to become part of the pension. However due to the changing work climate where people move companies more frequently occupational schemes are proving less common.
There are two types of occupational pensions schemes, the first is known as ‘Final Salary’ with this type the amount you receive from your pension is calculated from the earnings you were making prior to retirement. This is particularly appealing if you’ve been promoted over a series of years to a senior position towards the end of your career.
The other option is known as ‘Money Purchase’ here your payments are based on the amount of money you actually contributed to the pension. I.e. if when you started the scheme you only made small contributions you won’t receive as larger a payment when you claim the pension.
Personal Pension – some times people will want their pension scheme entirely separate from their employer, this is where personal pensions come in. They are completely independent from your work place and are organised through commercial organisations like banks and insurance companies.
However with personal schemes as the obligation to pay falls entirely with you if you pay in little or not very often it will have a significant impact on the amount you receive. Also their may be penalties for changing the amount you would like to pay in, if for example if you begin working for an employer who has an occupational scheme that may incur a charge.
Stakeholder Pension – increasingly becoming the most popular kind of pension is the stakeholder variety. It falls somewhere between the occupation scheme and personal types. It can be organised by employers, unions or other organisations like the Post Office. The advantage of this type of pension is it’s a lot more flexible than personal pensions and has less charges and penalties than other types.
Author Resource:- The Pensions Regulator offer information and advice for trustees and employers dealing. http://www.thepensionsregulator.gov.uk
PensionTracker provides free information on pension funds and pension advice
Pension funds add seven months to retirement lifespan
Some interesting news on the Guardian website today:
“Britain’s big pension funds last year increased their longevity assumptions by seven months for future retirees – suggesting that soon our life expectancies will increase almost as fast as we are ageing.
The pension schemes of FTSE 100 companies have increased their longevity assumptions for pensioners for the fourth year in a row, according to research by Mercer. Current pensioners are now expected to live another five months while future retirees get another seven months. On average, scheme members aged 45 are forecast to live nearly two years longer from retirement than a 65-year-old member. The gap between men and women is closing, with women expected to live to the age of 89 while men reach 87.”
Pension funds add seven months to retirement lifespan | Money | The Guardian.
As we’ve noticed at Pensiontracker, pensions are now hitting the headlines every day and for good reason: people are becoming increasingly aware and concerned about their retirement plans.
On the one hand, we now have evidence that people are living longer, with men now expected to live to 89. Assuming you retire at the age of 65, that’s some 24 wonderful years in retirement. But on the flip side, we have an increasing number of companies closing final salary schemes, hundreds of companies renegotiating their pension plans for employees and daily alarm bells from the government as to their ability to provide for people in retirement.
All of these should be seen as a warning sign that people need to start planning for retirement and maximise existing and future pension plans.
Pensiontracker offers a number of services to help people plan for their retirement including a database of pension funds, and a brand new pension calculator.
Pension Schemes – FREE tool
If you’re looking for instant access to FREE jargon-free reports on UK pension schemes, we’re pleased to announce a new service covering over 12,000 pension funds in the UK.
The online service provides individuals with quality independent information on their unit-based pension funds including the performance of pensions funds compared to other similar funds, asset allocation and other fund information.
Designed for the 55% of people who don’t use a financial advisor, and the 45% that do!
The new site provides individuals with pension fund information in a well formatted report that allows you to take control of your pension portfolio. All the reports are guaranteed to be completely independent and unbiased, as we don’t sell pensions or advice.
For those in existing Pensions Schemes
The free service gives you instant access to the latest available performance information for your pension scheme. Understand the fund management. See how the funds have performed and where they rank compared to other pension funds in the same sector.
For those thinking of changing pensions
Locate your pension and we’ll show you the best pension fund in that sector. Find the best performing pensions that match your risk profile and we’ll help you find a financial advisor to discuss the options.
Visit the site now at www.pensiontracker.co.uk
Pension income falls by more than 70%
I’m reading a new article in the FT (http://www.ft.com/cms/s/2/00123d26-1594-11df-ad7e-00144feab49a.html) that states Pension Income has fallen by more than 70%. The research by moneyfacts.co.uk suggests:” that a male contributing £100 gross per month into a balanced managed fund over a 20 year period and retiring at age 65 with a standard level without guarantee annuity will have seen his pension income fall from £8,998 per annum in January 2000 to just £2,542 in January 2010, a drop of £6,456 or almost 72 per cent.”
This is evidence again, as to the increasing need for the population to take a more active role in the management of their pension. Of the 50% of people who don’t use or trust financial advisers, a large percentage of those individuals are probably walking ‘blind’ into retirement with absolutely no idea as to the value of their pension plans.
I hope 2010 will be the year of the pension, with a significant increase in the number of people taking control of their pensions.
The unfathomable world of UK pensions
“The sometimes unfathomable world of pension performance has become more accessible for millions”.
According to our own experiences and countless surveys by pension companies, FSA and independents, a large percentage of the UK population neither understand or actively monitor their pension plans. Our limited survey suggested over 70% have little or no idea as to the performance of their pensions. So how do we address this ‘lack of action’ in the UK.
I think Chris Noon, partner at Hymans Robertson has part of the answer. In a recent FT article his company found that ‘eighty per cent of individuals under the age of 35 say pension information is confusing and “full of gobbledygook,”. There’s evidence in the Thoresen Report that suggests that if information was more easily accessible online, a significant percentage of people would use it. Importantly, it has to be sale free. People are looking for pension information that is unbiased, independent and not directly linked to selling a financial product.
Pension Tracker is a brand new service to address the gap in accessible jargon-free pension information. It will provide millions with access to improved information on their pensions; performance data, comparison with other pensions, asset breakdown and more.
Customer choice starts with quality, independent up-to-date information. With Pension Tracker, we hope people will become more active in their retirement plans.
The financial revolution
Have you noticed the financial revolution that has taken place over the past 3 years? Millions of people now use online comparison sites to help them choose their mortgage, credit cards, savings accounts, utility suppliers and insurance policies. Only a few years ago, it was common practice for people to stick with the same policy or financial products they’d always used.
Today, this online revolution allows people to become intelligent consumers AND save money.
Until now, the revolution has bypassed the pension world.
PensionTracker is a brand new online service that puts quality up-to-date information in the hand of pension holders.
Our intention is to empower pension holders to be more active in their management of their pension portfolio.
PensionTracker (and it’s operators Net Innovate Ltd) don’t sell pensions and we don’t provide advice. The site is designed to provide individuals with quality pension reports that put them in control.
Nearing launch of Pension Tracker
We’re making some final changes to Pensiontracker.co.uk ready for the launch date. Pension Tracker has been in development for over a year and it’s great to see the product out of the development cycle and into the pre-launch phase.
Pension Tracker puts people in control of their unit-based pensions.
Introducing Pension Tracker
It’s been a long time in development, but on the 1st Dec 2009 we released our beta version of www.PensionTracker.co.uk to a new audience. The site provides individuals with instant online personalised reports based on their pension portfolio. Pension Tracker introduces a range of new features to put people in control of their pensions:
a.) The online “My Portfolio” system allows individuals to register and keep track of multiple occupational and personal pensions.
b.) Users have the ability to keep track of pension valuations, including instant / daily valuations.
c.) The site offers multiple reports including individual pension and portfolio level personalised reports.
Pension Tracker is particularly well suited to individuals who do not have a financial adviser, but want some method of managing their pension portfolio.
Pension Tracker operates independently from any pension or financial company. There are NO product placements, NO sales pitch and NO advice. We simply give you control along with access to the latest pension fact sheet information.
