Understanding Your Pension Forecast in 2026
A pension forecast estimates how much retirement income you can expect based on your current savings, contributions, and entitlements. In 2026, with the Pension Dashboard rolling out and updated State Pension figures, it is an ideal time to check your forecast and take action if needed.
Your State Pension Forecast
The State Pension forecast is available for free at gov.uk. It shows:
- Your estimated weekly amount: Based on your current NI record
- Qualifying years: How many you have and how many more you can add
- Your State Pension date: When you will reach State Pension age
- Improvement opportunities: Whether paying voluntary contributions would increase your pension
Private Pension Projections
Your workplace and personal pension providers are required to provide annual benefit statements showing projected retirement income. These projections typically show:
- Current fund value
- Projected value at your selected retirement age
- Estimated annual income (usually based on annuity rates)
- Impact of different contribution levels
Projections use standardised growth rates set by the Financial Conduct Authority (FCA) to ensure consistency across providers.
Understanding Pension Projection Growth Rates
| Growth Rate Scenario | Rate Used | Purpose |
|---|---|---|
| Low | 2% per year (after charges) | Conservative estimate |
| Mid | 5% per year (after charges) | Central estimate |
| High | 8% per year (after charges) | Optimistic estimate |
These are standardised rates that may not reflect your actual investment performance. Your real returns will depend on your investment choices, market conditions, and charges.
Combining Your Forecasts
To get a complete picture of your retirement income, combine:
- State Pension forecast
- All workplace pension projections
- Personal pension projections
- Any defined benefit pension entitlements
- ISA savings and other investments
The Pension Dashboard, as it rolls out through 2026, will help bring these together. Until then, you may need to gather information from multiple sources.
What If Your Forecast Falls Short?
If your combined pension forecast does not meet your target retirement income, there are several actions you can take:
Increase Contributions
Even small increases make a difference over time. An extra £100 per month from age 40 could add approximately £50,000-£80,000 to your pension by age 67 (depending on investment returns).
Maximise Employer Match
Many employers match pension contributions up to a certain percentage. If you are not contributing enough to get the full match, you are leaving free money on the table.
Use Salary Sacrifice
Salary sacrifice saves National Insurance, effectively boosting your pension contributions at no extra cost to you.
Review Investment Strategy
If you have many years until retirement, a higher equity allocation may deliver better long-term growth. As you approach retirement, gradually reducing risk is prudent.
Consolidate and Reduce Charges
Old pensions may have high charges that drag on performance. Consolidating into a lower-cost pension can significantly improve your forecast over time.
How Often to Check Your Forecast
- Annually: Review your State Pension forecast and private pension statements
- After life changes: Job change, pay rise, marriage, divorce, or inheritance
- At key milestones: Ages 40, 50, 55, and approaching retirement
- After market events: Significant market rises or falls affecting your pension value
Getting Professional Help
If your pension forecast is complex (multiple pensions, defined benefit schemes, high earner considerations), professional financial advice can help you create an integrated retirement plan. An adviser can model different scenarios and recommend strategies to maximise your retirement income.