Are you wondering what your state pension will be when you reach the state pension age (SPA)? If so, the place to check it out is the gov.uk website, where a state pension forecast for UK citizens can be obtained. But, before you do so, this Moneyfarm blog is well worth a read as it will give you a good grounding.
| How can I check my State Pension forecast in the UK? | You can check your State Pension forecast online via the UK government’s State Pension forecast service |
| What information must I provide to check my State Pension forecast in the UK? | National Insurance number, date of birth, pension contributions and credits |
| How accurate is a State Pension forecast in the UK? | It is an estimate based on factors such as NI contributions, earnings, etc |
| What should I do if I have questions about my State Pension in the UK? | You can contact the government’s Pension Service or seek advice from a financial advisor. |
What is a state pension forecast?
A state pension forecast for UK citizens can be obtained from the “Check your State Pension forecast” page of the gov.uk website. When UK citizens visit the UK government website and input all the necessary information, the future pension forecast for UK citizens, along with the state pension amount to be received, will be given. The website will also tell you when you will reach your state pension age and how to increase the amount (if applicable).
The contracted-out pension equivalent estimate explained
The additional state pension, sometimes referred to as the state earnings-related pension scheme (SERPS for short) or the state second pension, refers to the extra sum of money you could get in addition to your basic full state pension (which is £156.20 per week) if you’ve made sufficient national insurance contributions.
For men born between 1945 and 1951, the minimum NI contribution requirement for the full state pension is 30 years. For those born prior to 1945, the minimum requirement is 44 years.
For women born between 1950 and 1953, the minimum NI contribution requirement for the full state pension is 30 years, and for those born prior to 1950, it’s 39 years.
There is no fixed amount when it comes to the additional state pension. How much you get depends on several factors, such as your NI contributions record, whether you contracted out of SERPS, and whether you’ve topped up your basic state pension. You can read further details about this here.
The additional state pension only applies to men born prior to the 6th of April 1951 or women born prior to the 6th of April 1953. It doesn’t apply to men and women born after the 6th of April 2016. Instead, they get the new state pension.
The amount of new state pension you’ll receive will be dependent on your national insurance record. For the 2023/2024 tax year, the full rate new state pension is £203.85 per week.
When you check your state pension forecast, the state pension forecast UK citizens are given includes a section entitled the “Contracted-Out Pension Equivalent” or COPE for short. This advises you on the amount of additional state pension you would have been paid if you hadn’t contracted out of SERPS during your working career. Many people did this in order to save more money in a private pension scheme.
The above information also applies to anyone requesting a state pension forecast in Scotland or a pension forecast in Northern Ireland.
The state pension for self-unemployed
The state pension works the same for all UK citizens, whether you are full-time employed, part-time employed, or self-employed. If you are in part or full-time employment, your employer will usually make pension and NI contributions on your behalf. But when you are self-employed, not only must you make your own self-employed pension contributions, but you must also make your own NI contributions.
Many self-employed people start and contribute to their own private self-employed pension schemes. This could be a SIPP (Self-Managed Personal Pension) or an ISA. If you use an ISA as a form of pension, you won’t be entitled to pension contributions tax relief because it’s not a pension scheme. However, you won’t pay income tax on any withdrawals.
How to apply for a state pension forecast
The quickest and easiest way to apply for a UK government pension forecast is via the gov.uk website. You can register for a self-assessment here. In order to make use of the web service, you will have to prove your ID via the Government Gateway. If you haven’t used it before, you can create a Government Gateway user ID by clicking here.
The Future Pension Centre is the office you must contact. Other than applying online, alternative ways to make an application for your government UK pension forecast are:
- By post – you will need to complete and send a BR19 application form.
- By phone – the pension forecast UK phone number is 0800 731 0175. Outside the UK, the number to call is +44 (0)191 218 2051. For the full range of telephone number details, click here.
If you have reached SPA (currently 66), and wish to continue working, deferring your state pension is an option. Deferring the state pension could help to control how much income tax you have to pay.
A specific retirement age is pretty much a thing of the past. Some people decide to carry on working past the state Pension age in the UK due to the rising cost of living. They can also decide to defer their state pension in the knowledge that when they decide to take it, the amount will be increased according to the length of the deferment.
The accuracy of your state pension forecast
Your state pension forecast in the UK will be accurate if the information provided for the forecast calculation is correct. However, the state pension is reviewed annually. Therefore, any state pension projection could change depending on the outcome of said reviews.
How the state pension is reviewed
In 2010 the coalition government introduced the triple lock mechanism. It ensures pensions are increased yearly depending on which of three factors is highest. The factors are:
- 5%
- The average growth of wages between May and July compared to the same period in the previous year.
- Inflation as per the consumer prices index measure in the year to September.
Given the extraordinary rise in inflation over this period in 2022, the 2023-24 state pension was increased by 10.1%.
The importance of having sufficient pension scheme coverage
It’s vital that you plan your retirement in advance, and getting a state pension forecast in the UK and a private pension forecast UK is key to that planning. The size of your retirement income will help to determine the type of lifestyle you could enjoy in retirement.
Yes, you can open a general investment account and use it to fund your retirement. However, contributing to a pension scheme may entitle you to pension contributions tax relief, so it makes sound financial sense.
Most people accumulate several pension options throughout their lifetime, particularly since workplace pensions and automatic enrolment emerged. It can become rather unwieldy in terms of keeping up to date with them all.
If you review your 50s retirement savings, it can be a good time to consider a pension transfer operation to amalgamate your schemes with your best-performing pension.
FAQ
Will my State Pension forecast in the UK be affected if I have a private pension?
Any private pension savings you may have will have no impact on your State Pension forecast in the UK.
When should I check my State Pension forecast in the UK?
Checking your state pension forecast in the UK on a regular basis is advised, especially if you’re preparing for retirement, close to retirement or making pension-related decisions.
How can I increase my State Pension forecast in the UK?
You can increase your state pension in the UK by deferring your state pension, making voluntary National Insurance contributions, and claiming free NI credits.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
