Lootman wrote:Urbandreamer wrote:most workers will, with contributions from their employers, have paid 20% of salary for their entire working life.
In 2022 the median salary was about £30k. Assuming that someone starts work in 22 at the age of 20 and works until 67 that's 47 * £6k.
That's over £1/4 mill. No small sum.
One could argue that it is a folly to work extra years once you have qualified for a full pension. And especially since you can buy back any "missed" years worth of contributions at a bargain rate.
I earned 18 years worth of stamps, maxxed out buying back years, and from next week will be getting close to a grand a month in SP. That is a decent deal. If I had worked 47 years, not so much.
But isn't the real problem those who still get a SP or equivalent without contributing at all?
Of course if contracted out for years working a few more years can claw back the contracted out reduction and get one the full state pension (I should be there in one more year)
I think (hard to know precisely as Contracted Out fund got blurred into my general SIPP) that my protected rights contracted out fund is circa £240k out of my total SIPPs, at say 4% dividends plus growth that ought to add circa £15k extra pensions plus I should receive full basic state pension when I retire in two years age 66 (As long as I do not live too long) and 25% of it ought to be tax free if they do not change the rules.
Extra years can have a benefit in certain circumstances. (I am well over 40 years contributions already, I think about 47 years in total now as even my school years 16-18 and all but one of my university years were qualifying.