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Do you understand your state pension forecast?

Pension pot savings

Following a Which? investigation into state pension forecasts it’s clear to us that the Department for Work and Pensions still has improvements to make.

I’m a fair way off qualifying for the state pension, but I was curious to see an estimate.

I’d say that the information in the paper and online statements I received was broadly useful. However, there were some key omissions.

State pension forecast

First, although they cover your National Insurance (NI) record to some degree, what this means and what you can do to plug any gaps is largely absent.

Secondly, your contracting-out record must be used to work out your state pension and ‘Contracted Out Pension Equivalent’ (COPE) estimates. (Before 2012, you could contract-out, or choose not to make contributions to a second, top-up pension, provided by the government.)

COPE is an estimated figure used to give you a rough idea of what you’re likely to get from other pensions, if you’ve opted out of the additional state pension. But the workings aren’t shared, and there’s no way of checking the DWP’s (Department for Work and Pensions) sums.

HM Revenue & Customs (HMRC) says that if you want to know whether you were contracted out, you should contact your pension scheme provider or employer. But this could take a great deal of time and effort, particularly if you’ve had several employers and some no longer exist.

Overall, this system isn’t all that clear and the confusion could lead people to question the accuracy of DWP’s calculations.

We think people need detailed contracting-out information to help them understand their state pension entitlement.The DWP should include this information on both your paper and online statements – and soon.

Working out your state pension

In fact, we think there’s still much more that could be done to improve pension forecasts.

In a separate piece of research we carried out earlier this year, we found that over a third of people approaching retirement age find it difficult to keep track of their pension pots. So we were pleased to see the Treasury back our call for a ‘Pensions Dashboard’ to be delivered by the industry by 2019, this will house all the information necessary to help savers make informed decisions about their retirement choices.

If you want to find out what your state pension forecast is there are a number of ways you can do so. HMRC provides an online service, it takes about 10 minutes and you’ll need to confirm your identity and provide your NI number.

Or if you’re over state pension age or reach it in less than 30 days, you can get a paper statement from the Pension Service. And if you’re retirement date is further off then you can contact the Future Pension Centre.

Have you seen your state pension forecast? Did you find your forecast confusing at all?

This investigation originally appeared in the September 2016 edition of Which? Money.

Alan Green says:
27 August 2016

After reading all your comments above here i have to say i fully agree with you all.The bottom line on state pensions is that they are now and have always been way to low.In real terms at todays cost of living a single person needs a state pension of around £300 per week/more for a couple. This current government and all those in the past have had the financial ability to fund pensioners with a real livable state pension but they choose not to.I really would like to see young and old put immense pressure on government and force them to pay us a real livable state pension as i have mentioned above. Many people have worked hard but due to low wages have never earned enough to save for a private pension but they have paid into the state system / taxes etc.In the uk we are seeing more pensioners year on year living in poverty and this has to stop. People don’t want free bus passes / winter fuel handouts etc they just want to receive a decent respectable up to date livable state pension which allows them to have a comfortable dignified retirement and no worries about choosing between paying the bills or eating etc . Governments waste billions of tax payers money in many different ways every year but you know a few individuals always make a nice profit from this. Maybe ( Which ) would like to start the ball rolling by using their ( influence ) to help pensioners of today get their message across which will in turn also help the pensioners of the future. ( So come on Which make a stand for pensioners )

Mr Singh says:
27 August 2016


You are spot on. The government is a BIG FAT JOKE. Come on Which get moe people YOUNG and OLD to put pressure on the FAT CATS and they know who they are in the goverment

Will you get anything in 20 years? Probably not……

I requested a forecast and when it came it said my state pension would be reduced because I had paid into a contracted out scheme for part of my working life. The reduction is £33 per week, yet I will only receive £100 per week from my private pension (at today’s calculations) and for that privilege I paid £500 per month for around 12 years.
I would like to know how DWP calculate the reductions they have applied.
I would have been better off putting my £500 private pension contributions a month into property or even the bank and being able to claim my full state pension. Yet another ‘scheme’ to rip off those who make the effort to save but who aren’t super rich.

Patrick lane says:
27 August 2016

I’m even more confused about my pension than before using this tool!! Not good at all in my eyes.

Carolyn says:
27 August 2016

I had no problem understanding mine and found the information clear.

My retirement age has changed 4 times since 2011 and not once have the DWP had the courtesy to inform me of anything in writing. While I accept and support parity in pensionable ages for both men and women the way this and previous Governments have dealt with this matter is scandalous. Tens of thousands of women have been cruelly cheated of what is rightfully theirs with no apology or proper, honest explanation. For 2 years I was expecting to retire in March 2017 when reached 63yrs and 5mths but ‘discovered’ 6 months ago it had been changed to March 2018. I’ve worked from aged 16 and didn’t have any children so that one can’t be thrown at me in the name of fairness.

I haven’t got a clue!! I am 60 now, they keep moving the goal post for retirement age.
I started paying in to a works pension two years ago. I tried to get a forecast but ended up more confused.

I`m retired. I know what`s in the pot OK. But despite the telephone interview I can`t understand what best to do with it to make it last. I understand when they say it .But then I look back on the notes and it`s all just TOO complicated to retain and act on.

I tried to use the gateway but it was flawed to the extent that I was unable to use it. I called the help line and got through straight away gave my details over the phone and an email came the next day with a complete schedule explaining that I should have been claiming 5 years earlier and later I got the monthly pay in along with a large lump sum along with interest paid.

I am not eligible for my state pension for another three years but there have been so many reports of variations in the new pension scheme I have no idea what I will be entitled to. It appears former pensions minister Steve Webb was allowed by the Treasury to transform pensions into a single ‘uniform’ payment as long as the total bill was no larger than the old scheme. So hopes of the higher headline pension quickly faded. As usual, it is likely to be all talk and no better in reality.

I was a public sector worker, supposedly with a final salary pension. The payroll manager of the school that employed me “Forgot” to include me in the pension scheme. When I was unfairly dismissed due to my disability now as a disabled person I have to rely on the state pension instead.

martin says:
27 August 2016

for the passed 4 years I have certainly experienced a lot of hardship after working, over a 40 year period, I like thousands of woman born in the 1950s have not got a state pension which is theirs,


pity the government did not get its act together regarding the state pension if it put in as much
time and effort as it has over its own pensions for mp.s and the fantastic amounts that they are allowed to award themselves rip off Britain comes to mind these people mp,s make a good living dictating how everyone else is going to live their later years in cash strapped position
after working all their lives and paying their nat insurance stamps shame on them pensioners
from the war years whom gave so much are treated with utter contempt by these mps.

I retired in 2006 after working from 1957 ; so I paid PAYE and National Insurance and Self Employed Tax for 49 years. When the Pension Service calculated my Pension they only took into account my employment Tax and NI Payments from 1978 . So my pension is much smaller than it should be. I should have worked for the BBC or Civil Service instead of getting my hands black.

I am quite worried as for years I thought I would get the standard which was about £115. I paid in for nearly 35 years before getting made redundant. Now I appear to have ‘contracted out’, never having been aware of this until now. I am also not sure if I get less because my husband has retired on the standard £115 and don’t remember seeing any information about couples. I don’t understand why we don’t just get the same regardless at age 65 whatever which would be so simple. I am better off than most but like everyone else, if I don’t get the standard I wont have enough for a civilised life and will have to work until I die.

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Tony says:
28 August 2016

Im 65 this year.
Very helpful State advice, but I contracted out for a few years to Aviva….
Aviva have (despite a myriad of e-mails and letter requests) continually failed to confirm the due benefits. Try phoning them!!!
So Ive no idea what Ive got to live on starting 2 months time!
Help please Which?

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For me Pension options are ridiculously complicated. Not only do they want it that way, they actively encourage it. If you have a company pension in addition to the state pension just try understanding all your options. They have spawned an entire financial services industry based on over complicating the issue. I was a qualified financial adviser for a year and my options may as well be written in hieroglyphics! Imagine how someone who has only a basic understanding of finances could possibly make an informed decision? Only with the help of a skilled financial adviser, and guess what, you have to pay for it. Employers should be made to provide comprehensive pension guides, in plain English, which should be backed up with pension surgeries where people can receive face to face guidance on their options. (lump sum, deferral, A.V.C. ‘s, annuities e.t.c.) The poor provision of pension advice is another method of discriminating against the poor. Those with the biggest and best pensions have earned the most money and can comfortably afford to pay for sound advice while those at the other end will probably make poor choices and end up worse off than they should have been. Sermon over.

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That’s the sort of sermon I like to hear, Mark. I agree with your suggestions about employers assisting their staff with their current pension options but they cannot help those with contributions in other schemes; most people, and especially those who have been with a number of employers, have scant recollection of the schemes they might have entered and what has happened to them. Even people in reasonably clear ‘final salary’ [defined benefit] schemes are confused. And the messing about with state retirement pensions over the last two decades has just added to the muddle and the difficulty of making sensible plans towards and beyond retirement. This has borne particularly heavily on women who have suffered from botched transitional arrangements under the equalisation policies with conflicting messages or no information at all and changing implementation dates. I think the changes to the state retirement pension scheme are well-intentioned and good in the long run but their ham-fisted administration and implementation have caused a lot of worry and stress. There were always bound to be some transitional problems but there seemed to be a callous disregard of people’s need for clear and reliable information about their retirement date and likely pension entitlements much further ahead in order to plan for the future. I also feel that because, quite rightly, the government had separated husbands’ and wives’ pension arrangements and made them independent, they overlooked the fact that they still existed as a married couple and needed to organise their retirement destiny in a mutual manner! Once they became unconnected code numbers in the bureaucratic machine little thought was given to the combined implications.

However, the public service generous final salary pension schemes that the rest of us fund do not seem too confusing.

For the last 30 years my husband has paid married couple’s stamp because he worked abroad and I accompanied him. When I recently contacted the DWP they told me I would get about £12 a week pension because the contributions paid in by my husband for me are no longer taken into consideration. What a place to find myself pension wise a few years before my retirement!

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Have you gone onto the WASPI website ladies? Suddenly stopping pension at 60, with no warning! Your pension is being stolen by the establishment. 66 now, 70 next year? Then if they get away with it, they will never give the national pension back to you. (this will probably include the men) You have paid into it, if you are 60+ you should be receiving it. Where is it? being wasted along with all the other taxes they collect? It is not their money, therefore is it not legalised extortion?
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