To make sure you’re on track to meet your retirement goals, it’s important to review your pension savings regularly. This will help you estimate the income they’re likely to generate when you retire. If there’s a shortfall in your savings, the earlier you spot it the easier it will be to fix.
Where to start and which figures to use
Below we explain where to find estimates of the monthly retirement income you can expect from different types of pension.
You don’t need to worry about the effects of inflation between now and your retirement because the pension statements and forecasts below give estimates of your future pension income in ‘today’s money’.
Bear in mind that all the estimates are shown before tax.
Get estimates for your potential sources of retirement income
Gather the details for all the pensions, savings and investments you have. Once you have these, get estimates from each of them to help you understand how much money you might get from all sources when you retire, including other savings and investments.
Check your State Pension
It’s a good idea to regularly request a State Pension forecast so you can see how much you’ve built up so far.
You can apply for one online, by phone or post – if you’re aged 16 or over and at least 30 days away from your State Pension age.
Find out more about how to check your State Pension forecast at GOV.UKOpens in a new window
Find out more about the State Pension in our guide State Pension: an overview
Check your defined benefit (final salary) pensions
These pay a retirement income based on your salary and how long you’ve been a member of the scheme.
These are also known as ‘final salary’ or ‘career average’ pension schemes.
They’re usually only public sector or older workplace pension schemes.
If you are actively contributing to one, your pension provider will usually send you an annual benefit statement.
If you don’t receive a statement, you can ask for one.
The statement shows how much pension you might get. It might assume that you take your tax-free cash lump sum.
Check your defined contribution (money purchase) pensions
With these schemes you build up a pot of money that you can then use to provide yourself with an income in retirement.
The value of your pot is based on:
- your contributions
- your employer’s contributions (if these apply)
- investment returns and tax relief.
Defined contribution schemes include workplace and personal pensions.
Schemes can be run through an insurance company or master trust provider, or you might be a member of an individual scheme set up by your employer.
Your annual statements will provide an estimate of your future pot value, and the regular retirement income your pension is on track to generate. This is based on you using your pension pot to buy a guaranteed income for life (known as an annuity). But you do have other options.
Check your other sources of retirement income
As well as your pensions, you might have other savings and investments that will generate an income for you in retirement. For example, cash deposits, share-based investments or a property you rent out. You may also be able to get statements or illustrations for these.
You can include all your sources of future income, including other savings and investments you have.
Check your progress using our retirement planning worksheet
To work out if you’re paying enough into your pensions, you need to have an idea what costs you will have in retirement and what sort of lifestyle you would like.
Consider essential costs such as food and utility bills, and also spending such as entertainment and holidays.
To help you do this you can download and complete our Budgeting in retirement worksheet (Opens in a new window) (PDF/A, 74KB).
Not sure where to start? The Retirement Living Standards, produced by the Pensions and Lifetime Savings Association, show you what life in retirement looks like at three different levels. And it shows what a range of common goods and services would cost for each level. This can be a starting point to help you consider how much money you’ll need to pay for your retirement.
Find out more on the Retirement Living Standards website
Or, to help you compare how much income you might have when you retire with how much income you might need – use our Pension calculator.
Your next steps
Whether you think you’ve been saving enough or feel you could do with some more help, we’ve got some other guides for you on our site.
Do you have a shortfall in your projected retirement income? Then find out more in our guides:
How to increase your pension savings
Ways to boost your pension in the run-up to retirement
It’s great if your savings are on track. But there might be things you can do to make them work even harder for you.
Find out more in our guide Making the most of your pensions
Do you think you may have lost track of some of your pensions?