Saroj is $39$ years old and has never saved into a pension previously. She has started a new

job. Her gross earnings are $34,500$ per year and she is automatically enrolled into her

employer's defined contribution pension scheme. Saroj contributes $8\%$ of her earnings and

this is topped up by $6\%$ by employer contributions and tax relief. At retirement, she also

expects to get a state pension worth $10,600\mathrm{.}20($before tax$)$ in today's money.

$1\mathrm{.}1$ Using the 'Pension calculator', work out how much disposable income Saroj will have in

the first year of retirement if she retires at age $67$ and uses the whole of her pension fund

build up under the defined contribution scheme to buy an annuity $($which$,$ in the calculator, is

an index$-$linked annuity$).$ Assume that there has been no increase in Saroj's real income or

pensions savings strategy over this time period. $(2$ marks$)$