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Pension: Britons prompted to use tool to check what they are set to get in retirement

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Pension saving is often considered essential for later life, with the state pension increasingly being viewed as a safety net. Putting enough money aside for retirement ensures Britons can leave the workforce when they choose and have the life they desire post-work. However, retirement also involves significant forward-planning, and people are generally encouraged to take action on the matter as soon as possible.

While the task of planning retirement may seem complex, various organisations can offer assistance.

One such form of help is available through Money Helper – a new brand which has comprised the more familiar Money Advice Service, Pensions Advisory Service and Pension Wise.

Overseen by the Money and Pensions Service (MaPS), and backed at distance by the Government, Money Helper intends to provide assistance through financial guidance for Britons.

Now, those planning for retirement have been encouraged to make use of the official pension calculator.

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© Getty pension saving UK 2021

In just a couple of minutes, the calculator offers important information, which includes:

  • A forecast of the likely pension income a person will receive in retirement
  • A target retirement income to aim for, taking into account a person’s salary
  • Details on defined benefit, define contribution and state pension schemes

Individuals will also be able to alter their retirement age to see how this will affect their income.

Furthermore, Britons can also determine how increased contributions or taking a smaller tax-free lump sum could affect what they receive each year.

How much a person needs in retirement will ultimately vary from circumstance to circumstance.

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However, individuals are usually advised to have a retirement savings vehicle such as a pension or lifetime ISA to help them reach their goal.

In addition, understanding one’s state pension entitlement will be particularly important to grasp this stream of income.

Details can be found via another tool, the state pension forecast, accessible through the Government’s website.

A regular review of one’s pension savings can also help Britons get on the path to the kind of retirement they are hoping for.

© EXPRESS pension saving

Looking at a pension pot to analyse how much is currently saved, any fees which may apply, and how a person can ultimately withdraw these funds will be key.

Recently, the Government Actuary’s Department (GAD) has completed a quality assurance exercise on this pension tool.

The work undertaken showed that the tool is “largely fit for purpose” and helping people planning for their retirement.

It checked if the tool is accurate and consistent, as well as looking at those using the tool to improve their experiences.

And it also reviewed the tool’s methodology to check it is still suitable since its initial development.

It is hoped the review will offer confidence to Britons that the tool can be used to help them plan for retirement.

GAD actuary Chris Witney who led the project, said: “It’s great to provide assurance to clients that their models are fit for purpose and provides confidence in their future use.

“Actuaries are well suited to quality assurance work. This is because of the review process we undertake as standard for actuarial work.”