These case studies look at some typical TSB people at different stages in their careers. You may find these helpful in planning for your retirement.
Joe recently became a dad for the first time to baby George. Whilst he’s always contributed to the Scheme, in his new role as a father Joe wants to make sure that he’s making the best provision for his family’s future.
Joe decides to use the Pension modeller to find out what difference it would make to his pension if he increases his contributions. He's amazed to discover that by increasing his contributions from 3% to 5%, the Company’s contributions increased to 13%. The modeller shows that this would increase Joe's predicted annual pension from £5,084 to £6,537.
Jenna took a break from working to bring up her children. While she wasn’t working and was focused on her family responsibilities, Jenna chose to contribute the default rate of 3% to her pension pot.
By reviewing their annual benefit statements, Jenna has worked out the joint retirement income that she and her spouse will have. She has also calculated their likely outgoings in retirement and in order to have the retirement lifestyle they want, they'll likely need more money.
Jenna uses the Pension modeller to work out how she can make up the shortfall in her household retirement income. She currently contributes 3% to her personal pension, but discovers that by increasing this by just 1%, the Company will increase its contributions to 10%.
The extra £15 a month that Jenna will be contributing to her pension account means that the total amount invested increases by £684 a year - this includes the higher Company contributions and the additional tax relief she’ll also receive. This small change in Jenna’s contributions boosts the overall estimated retirement income enough to allow her household to achieve the retirement lifestyle they want.
Alex joined the Scheme through auto enrolment and is currently paying the default rate of 3%. He believes this amount is sufficient to pay towards his pension at his age.
He talks to a friend who suggests he uses his annual benefit statement to see how much he's likely to get in retirement. Alex's friend had read two thirds of current salary is a good retirement goal to aim for. When looking at his statement, Alex soon realises that, although he's a long way from retirement, if he continues to contribute at 3% he’ll probably not save enough to live comfortably when he does retire.
He decides to use the Pension modeller to see what difference increasing his contributions would make. Although at the moment Alex doesn’t have much spare cash, he works out that once he’s paid off his student loan he’ll be able to afford to increase his contribution rate to 5%. As the Company would also increase its contribution, this could see Alex’s annual pension increasing by around 11% of his current salary.
Alex realises that the earlier he can increase his contributions the better.
Rosie has moved jobs a couple of times throughout her career and has two deferred pensions from previous employers. Although she has contributed to a pension for many years, when she divorced some of her pension was awarded to her former husband.
Her projected retirement income on her annual benefit statement is £6,500 a year. She's aiming for a retirement income of at least one half of her current salary, so she's clearly way off her target!
Rosie uses the Pension modeller to help her calculate how much more she will need to contribute to be able to achieve her desired retirement income. She decides to increase her contributions from 4% to 6%. Rosie ends up contributing an extra £50 a month but, due to the additional Company contributions and tax relief, the total increase to her pension account is £178.
Rosie is really pleased with the extra amount and continues to monitor her pension fund to ensure she’s on target.