Do You Know How Much Pension Will You Get?

If someone asked you how much your pension was worth would you know the answer? Or how much pension you’d get on a monthly basis when you retire?

The state pension age for women has been rising steadily to be the same as the retirement age for men. And on 6th October 2020, the age for both genders went from 65 to 66. And this isn’t the end. The age to get it will continue to go up and reach 68 by 2039. For so many of us, we’re going to be working harder for longer before we can get our pension. But this is mainly because people are living for longer. The government won’t have an unlimited amount of money so we have to accept that we’ll be waiting a bit longer to get ours.

It’s so important to know you’re on track and have an idea of how much pension you’ll get. Even though most of us weren’t not saving as much as we should.

Find out how much pension you should get from the state

To get a full state pension you should have paid in at least 30 years’ National Insurance contributions. That could be through employment at a job, or through paying taxes as someone self-employed. So the amount doesn’t change depending on whether you’re employed or self-employed.

At the moment state pension is £175.20 a week, rising to £179.58 from 6th April 2021. To check your current estimation of when you’ll get yours and how much it will be (not taking into account increases) you can head to the Government Website. You can either sign in with your Government Gateway user ID if you have one or verify yourself. The website will also show you how much you’ll get if you stopped paying National Insurance now. And how many more years you need to pay it to get the full amount.

How much pension your workplace will give you

For most of us, our state payout isn’t going to be enough to properly live on. Compare the current £9,141.69 a year from state pension to what you’re currently earning.

To find out how much you’ll get from your workplace pension you can take a look at your annual statement which you should get each year. This will tell you how much is currently in your pot and an estimate of how much you might get when you start to take it out. If you’ve had a few jobs and haven’t yet combined your pensions you can track them all down by heading to Pension Tracing Service. With a few details, they can track pots from previous employers, or if you opened a personal account and then stopped paying into it.

If you’re currently paying into a workplace pension look into how much you’re adding in. And how much your work is contributing towards it. And where ever possible increase your monthly contributions to ensure you’ll have enough money when you retire.

Work out an estimated final payout

Knowing how much state, workplace, and personal pension you’ll get you can use the Money and Pension Service Pension Calculator to find out your likely retirement income. The tool will show you what you’re on track to get and the annual income you should expect to draw from it.

If your income is high enough you may be able to think about retiring early. But I’m sure that’s a pipe dream for a lot of us. But if this shows your income is going to be too low you’ve got time to think about the next steps such as upping your monthly contributions to a workplace or personal pension. Or other forms of savings which can help when you retire like investments.

Do you know how much pension you’ll be getting?

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