4 minutes reading time (840 words)

How much will I have in retirement?

I’ve built different pension pots up through different jobs so how do I know what I’ve got and how much I will get when I retire? 
Years ago people would leave school, select a career and stay in that job for life. They would pay into the pension scheme and possibly be given a pension based on their final salary with no personal risk or responsibility towards the investment at all. This means that if the investment didn’t perform well, they still got their guaranteed pension. This still happens in some cases, but for the majority of us we tend to switch around different jobs, may have a stint at being self-employed and then employed again and worked our way around lots of different organisations. We may have paid into pension pots in some of these jobs and may have had the employer at the time contributing to these. Many of us ‘opted out’ and the government made contributions to a second pension pot.

When I speak to people, they normally don’t know how much they have within their pensions, where they are invested, what they are being charged and how they are performing. People often think that they are being advised by the provider which is not the case. What people don’t realise is that the responsibility for how well their pensions do is not down to the provider……….it is down to themselves. 

So why is this an important thing to know?
It is not normally something most people think about when they are young, and some people don’t pay into a pension at all. It does, however, become important when you start to think about retiring and how much income you will have to live on or just as importantly how much income you will NEED to live on.

At Veracity Financial Planning we work with our clients to help them understand what they have in place and the income that will likely give them in future. We constantly review this to give an up to date picture of what to expect and to take account of changes that frequently occur.

I saw clients recently who wanted to retire at a certain age. They wanted to have a certain amount of income, and I was able to map out where they were with their current arrangements which highlighted any gaps or shortfalls, and they can now work more efficiently in their planning if they want to retire early.

It might be that you have more than enough to retire on and if that is the case then great but it is often more difficult than people realise to retire early if they also want to maintain a particular lifestyle. It would be a good idea to think about how much you will need in retirement to achieve that lifestyle, at the age you want to retire so that you can put some meaningful planning in place.

Provider statements can be confusing.........
We see lots of provider statements that are sent through to people that can be very confusing for us as professionals let alone people with limited knowledge to be expected to understand. Often people don’t realise they are paying charges, but all pension plans do have charges, and it is difficult to understand the value of those charges you are paying for just from a provider’s statement.

105.2Statements will often show a projected fund at retirement, but it is difficult to understand what this forecast is saying as some take inflation into account and others don’t, and none show you what the real growth is to give you a better understanding of that forecast. These forecasts are based on buying an annuity at a certain age and again it is difficult to ascertain what assumptions the provider uses to calculate that.

With pension freedoms, an annuity is only one of the options, but this may not be the most suitable option for you. We can help you understand this.

We make the whole process and your understanding of it much more clear, we can write to your existing providers to find out what you have in place and then properly explain that to you. That will then give you an informed choice about what you can do with your existing arrangements as well as your plans.

If your pensions are more complicated than you would like and you would like to look at simplifying them, don’t understand your pension or just want some independent advice then we can to review what you have in place and we would be very happy to speak with you about this.

Please contact us by calling 0115 967 0888 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it.
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