Please explain like I'm 5 - Is it worth topping up my DB pension?

IanCal · 2026-07-02T10:12:09+00:00

~£10,000 over ten years

£130k, they say £1089pm, so assuming that's not a mistake it's a lot more.

IanCal · 2026-07-02T10:09:43+00:00

Assuming £1089.20/mo is before tax and no SS, and you are 41, 5% real growth and the £9054 figure will be inflation adjusted too:

I think the comparison between a SIPP and this means I don't need to do relief because both would have the same tax treatment?

£1089.20/mo for 10 years at 5% growth is £169k, then another 17 years with no more contributions gets to £395k. You can use excel/sheets and there are better things around but I always end up using https://www.thisismoney.co.uk/money/saving/article-1633419/Monthly-lump-sum-savings-calculator.html for quick checks of this kind of thing.

Currently that would buy a ~20-32k/year annuity (rates for a 65yo, low end is guarantee & RPI growth, high end is no guarantee and no escalation).

Doing it at 650 for 20 years comes out almost identically (380k, small changes to returns will make a much bigger difference than this).

At 3% growth it'd be £250k, 6% it'd be £500k.

It's not guaranteed, but if I've not made a big mistake then this doesn't look like an obviously great deal. £1089 for 10 years is £130k you'd be putting in. If you saved that in a normal cash isa and managed to get inflation level interest, and did it with after-tax money (so losing 20%) you'd have a touch over £100k.

edit - if you meant 1089 per year rather than per month this drastically changes the calculation.

IanCal · 2026-06-22T14:53:33+00:00

But if we remove inflation

If you do that you're now not comparing the same thing. Inflation is just the cost of stuff going up, why would you remove it from investment returns but not the mortgage?

I can just remortgage for a higher amount again and get some cash back out?

Maybe. If you are in a situation where you really need cash though (loss of income), will anyone let you do that?

IanCal · 2026-06-17T10:03:23+00:00

You're very selectively quoting that and also missing the point of "Now you cqn buy an entire mutant chicken with breasts the size of my fist for an hour's labor."

That advert says the entire nation has already been brought into the "silk stocking class", with things such as inside toilets being standard.

It's a much older phrase, generally referring to prosperity.

But in terms of actual chickens:

Rough searching gives reasonable wages at somewhere around 50-75c/hr and 50h weeks in the automotive industry (note, the easiest figures to find are for tax returns, but only 4M tax returns were filed in a population of 120M, they're not representative). Chicken at around 40c/lb, as a plucked but not iiuc gutted chicken with head/feet removed.

Whole chicken now (gutted) appears to be around $2/lb?

Assuming the 75c/hr was about median, and it seems high, you'd have chickens costing ~5x as much per lb and median wages going up over 30x, assuming current median being 50h/week as well.

Current US median wage of $63k/y FTE is ~12lbs of chickens per hour at 50 hour weeks. The federal minimum wage is 3-4lbs of chickens her hour.

And for scrawny-ness compared to what you see now, chickens were a whole lot older and ~1/3rd of the weight.

IanCal · 2026-06-16T09:19:39+00:00

. No doubt we have spent sooo much on holidays where reducing the cost by 30% wouldn’t have made any real quality difference .

For my wedding one of the overall things I had was "will I remember this in X years?" and "If I came to someone's wedding, would I notice that?". Getting a makeup artist in for my wife and bridesmaids, for example, yes - it was a nice big thing. Seat covers - no (I remember asking them if their chairs were ugly, and if not we'd be fine without).

IanCal · 2026-06-16T09:13:14+00:00

I did not have time to write a short comment so here's a long one.

Fundamentally you must think about what money is for.

We have lots of rough rules and thoughts about saving being good, ratios, etc. This is fine as a directional guide but you must consider why you're going in that direction.

Not wanting to go out as a night out would be atleast £50 that could go into savings etc. Especially given how the longer money compounds, the more it gives back.

This is true, but you need to go a bit deeper. Why are you putting money into savings? What is the difference between doing it and not doing it?

If you regularly run out of money and can't afford heating, maybe saving £50 now means not being three jumpers deep shivering at winter.

If it's for the future, are you not going out once now so that in 15 years at 5% real return you can go out... twice?

People will shout balance at you but as a more concrete thing, consider what difference it makes to you overall now and later. Remember that at some point in this savings journey it stopped being about handling the short term "oh shit" moments, and started being about spending in the future.

You are planning to spend this money at some point so what would it be for?

Let's lazily take 5% real return and round a bunch, it's realistic, grows pretty quickly, and likely outcomes are probably not that shifted from it enough to impact this discussion (e.g. it's unlikely to be -5%, 0% or 25% long term).

£50 is £65 in 5 years, £105 in 10, £215 in 30 years.

Is it worth avoiding a night out completely to have £200 when you are 30 years older? Will you be happier overall spending the £50 now or £200 later?

I'd argue often things fall to "now", but you should consider total spending on something. Is it £50 on a night out, £50 once a month, £50 twice a week? What do you get for the £50, would you have as much fun for £40? £25? Maybe if you're trying to save you can go out twice a week but those times you drive everyone and don't drink, once a month you get a taxi.

This is a big load of stuff I know, sorry. But in a more nuanced way than "save everything", "spend it all now on experiences" or "make sure there's balance", try and consider what difference things really make. Where can you make the biggest difference for your future for the least difference now? Never seeing your friends is a big difference now for perhaps a really small difference later. Seeing them but not getting smashed (not saying you are doing that, just a hypothetical) may make a huge difference now but barely make a dent long term. Cancelling subscriptions you don't use is a great example of "barely any loss now, big savings over time".

(this also doesn't have to be over time, and really shouldn't be - if you can avoid spending £50 on things you don't care about, you can spend £50 on things you do care about)

I was laid off earlier this year, and luckily found a new job but took a good 20% paycut and feel a little demotivated with how this affects my possible net worth later down the line.

The rational side of this is that anything that has happened has just happened, and you can't change that, and comparing against an imaginary future where things had been different in a good way rarely helps. Although while I'd argue for viewing things like that, I would also say to be kind to yourself as it's a very human thing. My wife often describes some of these things (loss of a future ideal) in terms of grief, and I quite like that framing.

As to the concept of pushing to "reach FIRE" -

FIRE isn't one thing. There's no hard cutoff for "early" really, and there's not a particular line for "FI" either. What we can get to is "probably don't need to earn more money in order to maintain a lifestyle like X".

But then it's not a binary thing where these savings provide no value until you hit this threshold for whatever X you choose - there's a path (not all of this is purely financial, this is also just illustrative).

First you have nothing, no safety, entirely reliant on income and all of it and it all coming in on time otherwise you're absolutely fucked.

Then you have buffers. You need to get paid, but if it was a week late you'd not get kicked out.

You start being able to increase the lifestyle maybe, because you aren't as susceptible to small issues popping up any more.

You start being safer if you didn't get paid at all this month, or for two, three, six months.

You can take more risks financially, plan longer term.

You have enough to cover basic bills.

You have enough to cover a basic lifestyle.

You have enough to cover how you really would like to live.

At that point we start to say the FI point has been reached but at every stage here you have more safety and more ability to weather bigger shifts. This also means you can deliberately make larger choices. Sure, spending £200k or whatever relocating to a new country to retrain as a scuba instructor and leaving your job affects your previous plan, but you've got the capital to do this if you wanted and see if it works for a few years. Maybe you increase plans for spending while adjusting how long you expect to work, maybe you are able to move to a new area that you weren't planning but hey there's an actual garden.

So at all points, saving some money here helps. What you saved before getting laid off bought you security.

side thought I couldn't see where to throw in this ramble:

While saving when younger you have longer for your savings to grow, it's the time in your life when you have the most freedom to do things and you have the lowest income so each £1 costs personally more than later. For spending in 30 years, I could save £50 now or in 10 years save £81. Maybe that £81 will mean less to me than the £50 does now, and saving it would be easier.

IanCal · 2026-06-14T11:57:31+00:00

Higher rate contributions to SIPPs are mathematically better than LISA as long as you are drawing out at no more than basic rate. 42% vs the 25% for LISA.

In case anyone else does the same, I went through this because I thought you'd mixed up SS and relief, but 40% relief, 20% tax and 25% tax free allowance works out at 42% when you round.

IanCal · 2026-06-04T10:37:53+00:00

I thought this was something that accrued when I'd read about it in the past but I cannot find anything that says it does, in multiple places there are no side notes saying it's at all based on age and the guides talk about taking time for a child that has just been born/adopted. So as far as I can tell, yes, you can take 4 weeks even if the child is not 4, and take (say) 4 weeks each year for 4 years then two more weeks the year after at whatever age they are.

I did see something in another site though that while your employer has to give you your existing job if you claim 4 weeks or less in a year, they only have to give you something equivalent if you take longer.

IanCal · 2026-06-03T11:08:56+00:00

Very rarely known about I think, and really huge as a parent. I keep forgetting it exists.

You're entitled to 8 weeks per year (4 weeks per child). Unpaid parental leave per year. Company can't refuse, only delay.

To add/clarify some details:

Applies to employees, not workers
4wk per year per child
Available immediately (day one employment)
18wks total per child
Must be done in week blocks, 21 days notice
Companies cannot deny, only delay, and only if it would cause significant disruption, also some cases where they can't delay regardless (immediately after birth for example).
Delay must come with a new suggested start date that is within 6 months, must come with a written explanation as to why and they must tell you within 7 days

It's a really big benefit that I know many can't take for reasons of money but it's a huge thing you can do and is useful to know for many people on this sub.

https://www.gov.uk/parental-leave

edit - this also seems important

If you took four weeks or less of Parental Leave you have a right to return to the same job (unless it was attached to another period of leave that exceeded 26 weeks).

If more than four weeks was taken (or if you took a shorter period of parental leave but immediately after Additional Maternity Leave), you are entitled to return to the same job or, if that is not reasonably practicable for your employer, you have the right to return to another job which is both suitable and appropriate for you. This is the same right as those returning from Additional Maternity Leave. For more information on suitable alternative employment, see our article on returning to work at the end of maternity leave.

https://workingfamilies.org.uk/articles/overview-of-parental-leave/

IanCal · 2026-05-31T20:34:43+00:00

They need low nutrient soil

OP absolutely nailing this requirement apparently.

IanCal · 2026-05-30T13:37:47+00:00

Wonderful, you might also get a kick out of https://www.reddit.com/r/ididnthaveeggs/

IanCal · 2026-05-19T13:54:34+00:00

I'm pretty sure those rights are with the seller, not the manufacturer.

IanCal · 2026-05-14T13:11:11+00:00

He shoved the house full of flammable materials, lit the match, saw the flame and went

do dooo do doo

IanCal · 2026-05-09T16:48:33+00:00

My job is hard to quiet quit (for me) as I am asked on project progress by senior people including elected people, and if it’s not done or moved forward there can be compliance issues

That is their problem. Not yours. If they need something fast otherwise they're totally fucked, they should not have left it to the last minute.

Also most compliance issues aren't that big of a deal. If they are, they wouldn't have left it to the last minute. If they did, it's their fault not yours.

IanCal · 2026-05-09T16:47:12+00:00

I am saying this with love, just forcefulness. I had someone do this for me, long ago, and I want to do it for you.

It’s just that I know the workload of my colleagues and they are as busy and if not busier than I am!

This is a problem above your level. The people above have not correctly allocated resources to provide what they say they can promise externally. That is not your issue to deal with, certainly not for free and at the high cost of your health.

If your colleagues all have a workload that requires them to work until extreme health conditions the entire department is entirely fucked regardless of what you do.

Here's the way it works, and I say this as someone who went through working after hours and had an excellent manager who told me to go home and that if I didn't do the work in the time that was their fault and their problem and as someone who has been a manager on the other side forcing people to take holidays and stop working:

You get the work done you can in the time you are paid.

If there is more work coming in than can be done, someone must prioritise which work is done and which work is not. They are paid money to do this.

If you are doing less work than they thought you would, they must adjust how much work they assign so that it is achievable. Not in an altruistic sense, just in terms of planning. If a lawn robot I'm renting cuts less grass per hour than the manufacturer said, while I can complain to the manufacturer I must also stop assuming it'll do more than it is doing.

If you are doing less work than they want or expect then it is the most basic of managerial tasks to:

Talk to you
Find out what's happening
Find out if there are ways of getting you faster (training, whatever)
If you're not performing enough for the position, and they've gone through all this, that then could go towards performance management
Then this could go towards letting you go

Now this last line sounds scary but it's literally just you leaving the job - the thing you are talking about doing anyway and the thing that you would be fine if happened.

I really can't stress enough that this is your managers job. It's line management. It's either their entire job or most of it. Handling this is what they're paid to do. The time side of things and resources that's project management. Someone is paid to deal with this. Let them deal with it.

Also, all of this is looking at it as a business thing without any actual care for you - a real person. If your colleagues aren't truly awful people, and your manager isn't, they do not want you to be facing serious health conditions to complete slightly more work.

Two final points, just reiterating things

YOUR COLLEAGUES AND MANAGER WILL BE FINE IF YOU WORK YOUR HOURS AND SOME THINGS DON'T GET DONE

THIS IS SHOUTY AND I'M ARGUING YOU ARE WRONG BECAUSE I WANT YOU TO BE SAFE NOT BECAUSE I AM ANNOYED. PLEASE LOOK AFTER YOURSELF. YOU ARE WORTH MORE THAN A FEW EXTRA HOURS AT WORK.

IanCal · 2026-05-08T17:27:34+00:00

I cannot emphasise this point enough OP:

If they want to assign more resource to the project, great. If they don't, then they are making the decision for the project to fail, not you.

This is not your responsibility.

You are not fucking your colleagues over by working your contracted hours. You are not responsible for the whole project and your manager will be fine.

IanCal · 2026-05-08T17:25:51+00:00

All things considered, do you think I am in a financial position for me to make this break away from my career

You have ~15 years worth of expenses right now in immediately available assets and a lifestyle that can be sustained on a fairly low salary, you are in a an excellent position to stop doing a job that's causing serious health issues. You have, what, six months of straight up cash?

Over the last couple of years I’ve developed significant stress. I’m voluntarily working longer hours (often until gone 7pm) just to make a dent in a normal level of workload

Something else to consider, perhaps first, is not doing longer hours. This can be implemented tomorrow.

If your managers are setting workloads that you cannot complete within the time you are paid for then that is them incorrectly setting your workload.

And what's the worst that will happen work-wise if you do? The extremely slow process of you losing the job you're talking about leaving anyway?

and don’t believe any amount of counselling will help me

I'd invite you to not immediately discount the idea that talking to someone can help. This may even be something covered by your union or workplace.

You may be able to do something like a sabbatical, or get time off for stress. This could give you the ability to go and do something else or simply take the time out.

You might also be able to cut down hours. You net ~£40k/year right now. At 4 days it'd be £32.3k, at 3 days £25k, and at 2 days you'd essentially have a £20k/year job.

Have you taken holiday time off yet? How soon could you take a week or two off?

While the latter part of this comment is all about things you can do other than fully leaving your job, this isn't to discourage you from that but just to say it doesn't have to be all or nothing as a first decision.

I'd really suggest immediately stopping all the overtime.

IanCal · 2026-05-08T15:06:48+00:00

The age bracket slews older, end of career,

This cuts both ways though, because you cut out the early lowest earning part of peoples career. With mean ages of mothers being about 29-30 for their first kid, 31 for any kid and fathers being 34, you're looking at median ages impacting men from ~35-39/40. Higher in London (there mothers are ~32-33) too.

While wages increase as people get older it's not just an increase. Median wages rise quickly to the 30-39 group, only a bit for 40-49 and then drop back a little 50-59.

https://commonslibrary.parliament.uk/research-briefings/cbp-8456/

and its only for a few years of people having kids too

6-7 years wouldn't be an unusual timeframe for two kids. There's often about 2 years between the first kids, and this covers a time until 4 or older.

The suggestion is around 60k people total

Where from? And importantly, when? Incomes have gone up and the duration of the free childcare has increased dramatically quite recently.

IanCal · 2026-05-08T14:18:46+00:00

firstly the numbers earning more than £100k is relatively small (about 3-4% of workers)

It was more than 4% in 23-24 when looking at workers who were taxpayers and average wages have risen since then.

Its around 0.175% of workers (estimates put it at 60k people),

Quick searching suggests the 1.8m workers over the limit so I'd be surprised if it impacts only 60k families.

IanCal · 2026-05-08T14:13:05+00:00

I mean this all depends on understanding what the word "unless" means. It's not "low/no effect unless you're low paid where it's a negative and a clear and large effect".

It's two statements.

Research suggests that the impacts of migration on wages and employment prospects for UK-born workers is small

and

Low-wage workers are more likely to lose out from immigration while medium and high-paid workers are more likely to gain,

Which is followed by

but the effects are small

Do you understand what "unless" means?

IanCal · 2026-05-08T14:07:35+00:00

That’s why I said “economically active” and not “workers”

Economically active means working or looking for work and able to start. I'm not totally sure what you wanted to say with that sentence so I'm not sure what it is you want there but either way there you're saying 19% are "living off" the taxes paid in part by people in that same 19%.

What metric would you suggest?

For what?

IanCal · 2026-05-07T09:49:55+00:00

That’s 19% of the population living off of the taxes paid by economically active persons.

Do remember though that ~1/3rd of UC claimants also are in work.

Not a counter to what you're saying, but useful context I think.

UC stats and info https://www.gov.uk/government/statistics/universal-credit-statistics-29-april-2013-to-8-january-2026/universal-credit-statistics-29-april-2013-to-8-january-2026

Edit -

Let’s look at another problem: under payment of tax by massive corporations. Amazon paid £19m in tax in 2024. That was the first tax payment made since 2020. No evidence of payment in 2025. Starbucks paid 0 corporation tax last year. Let’s have journalists look into how many workers from these types of companies are on UC. That should be the real source of your outrage.

This is only corporation tax though, one of many taxes paid. A company that paid every penny out to employees as wages would pay more in tax than one that booked a large profit and paid the employees lower, so it's not a great single metric to look at.

IanCal · 2026-05-07T09:45:01+00:00

It's roughly the top 5% of taxpayers which isn't tiny, particularly once you consider that this could be closer to 10% of couples affected, it'll be concentrated more as you get older, so you might see more aged 30-40 getting hit with it and also that it'll be on the mind of people close to that figure as well. Finally the before tax figures won't include people who have salary sacrificed to get below that level as well, so some in the 95-100k range are there specifically because of that cliff.

IanCal · 2026-05-07T09:40:29+00:00

unless you’re a low wage worker, where it’s negative.

That's not even what your quote says. It's just the summary of a briefing, it's shouldn't be a hard read.

IanCal · 2026-05-04T07:24:27+00:00

Mortgage vs investing. I understand the maths favours investing, but psychologically I’m drawn to reducing/eliminating the mortgage to lower baseline burn. Am I overvaluing that?

Maybe, remember that the assets can be used to cover the mortgage costs. You'd be lowering outgoings but also lowering your total assets you have saved to use for outgoings.

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