Pensions

Does the mere mention of pensions send you in a spin. Read our pension basics and go through our simple 4 step process to understand where you stand, and any adjustments you may need to make in the future.

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Understanding your pension

1

Find your pensions

Access old pensions by contacting your old employers and going through your paperwork. You can work out how much your state pension forecast by going to the Government website. If you can not find an old pension you can do a Government search.

2

Add up your pensions

Calculate all your pensions and future contributions to view your total pension amount. How to calculate your old pensions.

3

What are your retirement costs?

Work out how much you will need on a yearly basis, by calculating your outgoings.

4

Retirement Age

Calculate all your pensions and future contributions to view your total pension amount, then divide this by your yearly expenses this will give you the number of retirement years. You may need to save more, work longer or adjust your retirement depending on these calculations.

Budget Planner

To help you manage your money, use our free and easy-to-use Budget Planner

In this guide

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Equity release

Accessing the capital (house valuation minus any mortgage) in your property when you reach retirement age. You will receive a one time payment or regular amounts. The property will be sold to repay this money (plus interest) when you die or you go into care.

Auto-enrolment

Since 2012 employers need to contribute to employees pension fund if they own over £10,000 a year and over the age of 22. You can opt out if you want to.

Annuity

An annuity is an insurance product that allows you to exchange your pension pot for a guaranteed regular income that will last for the rest of your life. The Insurer will estimate how long you will live and this will determine the amount you will receive each year. If you have had an illness like cancer you may well get a higher annuity.

SIPP (self invested pension plan)

Like an ISA it is a 'pension' wrapper for investments. It is often more flexible than your defined contribution pension allowing you to take money out earlier (55 years of age) and taking out 25% as a tax free amount. Your pension provider can also claim tax back from your investments of 20% to 40% (dependent on your tax threshold) to invest into your SIPP.

State pension

This is received if you have paid national insurance for at least 10 years, for a full state pension you will need to have worked 35 years.

Defined benefit (DB) pension

Commonly known as a final salary pension, which means you get a fixed amount each year until you die.

Defined Contribution (DC) pension

A pension where your money is invested and the amount you get when you retire depends on how much you paid in and how your investments have performed.

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Tools & Resources

Calculators and Forecasts

Futureproof My Life Pension Template

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Workplace and pensions calculator

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Check your state pension age

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Check your state pension forecast

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Budget planner from Moneyhelper

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General pension advice

Find your pensions - Government

If you can not find an old pension the Government offers a service to find it.

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Find your pension app

If you know some details about your pension this app will try and find your pensions.

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‍Pension & Lifetime Savings Association - guidelines on retirement‍

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Life expectancy Calculator

Understanding how long you will live will help you decide how much money you will need to retire on.

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Find pensions - Free Aviva service

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Types of Pension

Auto-enrolment for a company pension

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SIPPS in detail

Self invested pension providers (SIPPS) guide from Money helper

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Best rated SIPP providers

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