Pensions: what can I
expect from retirement?

As you get closer to retirement, you will want to have a clear idea of how much you can expect to receive as income. To understand this, you will need to know which types of pension(s) you hold.

This may include finding any you may have lost track of. Achieving your goals for retirement is easier with a full overview of your current position and the options available to you. 

What can I expect from my pension?

The factors that are going to influence your income at retirement will depend on the type of pension you hold.

Defined contribution pension

Income will depend on the following:

  • the amount that you and your employer have chosen to pay in
  • the investment returns of the funds that your pension is invested in (these funds may have been chosen by you, or you may have agreed to accept the default fund set by your pension provider)
  • how you draw your pension income from your investments at retirement; for example, whether you will be taking your pension through an annuity or drawdown

Defined benefit pension

Income will usually depend on the following:

  • how long you have been a member of the scheme
  • your pensionable earnings (this could be your final salary, the average salary you have earned over your career, or may be worked out differently)
  • your accrual rate (this refers to the proportion of your final salary that you will get as a pension for each year you are a member of the scheme)
  • your income at retirement, which will usually be calculated by dividing years in the scheme with the accrual rate, and multiplying it by your pensionable earnings
  • when you retire in relation to the scheme retirement age; early retirement may reduce your starting pension income, your adviser can help to explain this further

Finding lost pensions

It's not unusual for us to change employer several times in our career. Unfortunately, the rules around auto-enrolment do not include pension transferral, meaning you could have pensions with previous employers that you may have lost track of.

Search for old statements, as you should receive one annually from every pension scheme you are a member of. If you are not receiving statements, it could be because you have changed address. Contact your past employers, or use the government pension tracing service to find out information about the pension provider.

Pension transfers

For those with defined benefit or occupational pension plans, it may be possible to request a cash equivalent transfer value (CETV), which is the value the scheme would provide in the event that you’d want to transfer to a personal pension or another occupational pension scheme.

It's important to have a very clear understanding of the value of the guarantees that these pension schemes offer. In most cases, the value of the guarantees, the impact of statutory protection from the Pension Protection Fund (PPF), and the lack of investment risk within the scheme will mean that the pension should not be transferred. However, for those with significant assets and a clear, sustainable lifetime income plan from other sources, a transfer can provide alternative benefits with greater flexibility, access and estate planning potential. The best plan for you is going to depend on your individual circumstances. You should speak to an independent financial adviser to discuss your options.

Defined contribution schemes, also known as money purchase pension schemes, are more common today. If you’ve moved jobs regularly, or are self-employed, it's easy to end up with a variety of money purchase pension schemes with different providers. Often, people are afraid and maybe a little sceptical of pension schemes, as they can be complex to understand; but the loss of value for multiple pension schemes sitting untouched can be far greater than you imagined.

The transfer of any pension is a complex decision, so it's important to have a good understanding of both the benefits and guarantees offered within the existing scheme, as well as the cost implications and other benefits of switching. Our qualified financial advisers can guide you through every step of this process, providing independent advice and reporting that will give you a clear understanding of the advantages and disadvantages of each option.

State pension

The single-tier State Pension has recently been launched and understanding your entitlement in advance is very important. Whilst the starting pension rate has gone up, there could be deductions for periods that you were contracted out of an Additional State Pension over the years. This could mean your starting state pension may be less than the single-tier flat rate.

The earliest that you can take your State Pension is when you reach State Pension age. This is specific to you and is worked out based on your gender and date of birth. You will usually need at least 10 qualifying years of National Insurance contributions in order to receive any State Pension, and to receive the maximum, you require 35 years. However, if you are short of years, it may be worth paying voluntary contributions to make up these deficiencies. If you would like to learn more, please visit

What will happen to my pension if I die before retirement?

In the event of death, the benefits payable will depend on many factors, in particular the type of pension you have, and whether your pension is a defined benefit or a defined contribution scheme.

If you die before reaching retirement, defined benefit schemes are more likely to provide an income for your dependents, with a return of your contributions plus interest. If you are still an active member, many employers will combine this with a death in service scheme to provide a more significant lump sum.

For benefits after retirement, defined benefit schemes are likely to provide a spouse’s or beneficiary’s pension, usually between 50 to 66% of the pre-death pension. This will provide some level of increase in payment for the dependent to ensure it keeps its value in real terms, given the damaging effects of inflation.

Defined contribution schemes will often return the entire value of your pension fund at death, but with no guaranteed income. The fund is payable to your nominated beneficiaries, which can be a trust; and in the event of death before 75, this can be free of tax. For many schemes, the payment of the death benefits is discretionary and controlled by the pension trustees. The advantage of this is that, the pension value is unlikely to be paid to your estate, and is therefore unlikely to be valued within your estate for inheritance tax purposes. Therefore, it’s important to ensure you’ve completed your pension scheme’s Nomination of Beneficiary form.

Retirement planning can be complex, but with a clear financial plan in place you can ensure to make the most of your savings. If you would like to discuss your retirement options, get in touch and speak to an independent financial adviser.

Pensions services

SIPP icon


Whether a SIPP is right for you or not will depend on your personal circumstances. Speak to an adviser to learn more about a SIPP and its suitability for you.

Find out more
Business Building

Workplace pensions

You may have been auto-enrolled into your employer’s workplace pension. Read on to find out more about the type of scheme you have joined and what that means for your pension pot.

Find out more

Find out how we can help you


Book a consultation


Our offices


01562 881 082