How do I check my pension?

The nation is not saving enough for the future. That’s the stark conclusion of Pensions UK’s latest Retirement Living Standards research. 

The annual benchmarks, calculated by Loughborough University specialists, show that a ‘minimum’ retirement lifestyle now costs around £13,900 a year for a single person and £22,500 for a couple. A ‘moderate’ lifestyle requires £32,700 and £45,400 respectively, while a ‘comfortable’ retirement comes in at £45,400 for one person and £62,700 for a couple.

The latest figures reflect the rising cost of everyday essentials such as food, energy and transport, as well as the price of enjoying life through holidays and pastimes. They also raise serious questions about whether current savings rates are enough. The research concludes that fewer than a quarter of workers are on track for a ‘moderate’ standard of living, and fewer than one in ten are expected to reach ‘comfortable’.

Crucially, these numbers are expressed in today’s money. If you’re decades away from retiring, inflation (rising costs of goods and services) could significantly increase what you need in pounds and pence. Assuming inflation averages 2% a year, something costing £1 today will cost roughly £1.49 in 20 years’ time. So, if you want an annual income of £30,000, expect that to equate to almost £45,000 in two decades.

Here’s how to check your pension is on track in five simple steps.

1. How do I check my pension contributions?

The simplest way to check your pension is to review your pension statements. If you’re saving into ‘defined contribution' pensions, or have done in the past, your pension provider must send you an annual pension statement. 

This typically includes the current value, contributions added over the year, and an estimate of the annual income your pot could provide based on certain assumptions. It’s usually shown in today’s money, meaning inflation has already been factored in, which makes it easy to compare with the living standards benchmarks.

If you’re not sure how to find your statement, most providers now offer online access via apps or online portals where you can check your balance at any time. Contact the pension provider to find out how to access yours.

2. How do I check what pensions I have?

Many people accumulate multiple pension schemes over their working life, especially if they’ve changed jobs frequently. It’s easy to lose track, so to get a full picture you’ll need to identify all your pensions, including any defined benefit schemes, current and previous workplace pensions, and any personal pensions such as SIPPs that you’ve set up yourself.

If you’ve lost details, the government’s Pension Tracing Service can help you find the provider with some basic information.

3. How do I check my government pension?

Alongside your own retirement provision, the UK State Pension forms an important part of most people’s retirement income. For many people, it covers their essential costs, and for a couple receiving the full amount of around £25,000 a year, the new State Pension covers the ‘minimum’ lifestyle threshold. 

The new State Pension kicks in when you reach State Pension Age – currently 66 and rising to 67 by 2028. What you receive depends on your National Insurance contributions and the number of ‘qualifying years’ accumulated. You can check your State Pension forecast online via the government’s website. 

4. How to check pension status overall? 

Once you’ve gathered your pension information, calculators can help you estimate whether you’re on track. Our pension contribution calculator looks at your existing pension pots, potential returns, and target retirement income. This gives you an idea of the monthly contributions required to meet your retirement income goal.

If your projected income falls short, don’t panic. Small increases in retirement savings, especially early on, can make a significant difference thanks to compounding.

5. How can I see my pension planning more clearly?

Checking your pension doesn’t have to be complicated. By reviewing your statements, tracking down old pots, checking your State Pension, and using calculators, you can paint a clearer picture of your financial future.

If you want further information, download our free Guide to Pensions and Retirement to help you understand how you can plan for the perfect retirement. You also don’t have to face decisions around retirement on your own. Professional Financial Advice or Financial Coaching can offer peace of mind you are making appropriate choices.