A pension forecast can relate exclusively to the state pension or to a private pension. It is a method of calculating how much you can expect to retire on. With a state pension forwcast your National Insurance (NI) contributions will be looked at to determine the rate of state pension you would be currently entitled to. The forecast can also find out how much you will receive based on assumptions relating to future NI contributions. A private pension forecast will look at contributions, projected growth rates, and how much income the eventual pot is likely to equate to in real terms.
Learn More about your State Pension
There are a number of ways to learn more about the state pension forecast though most are tailored to certain situations. For example, British citizens and British expatriates will have different sets of forecasts. A simple request for form BR19 is necessary for British citizens with expatriates needing form CA3638. If you are unsure of the procedure, contact an independent financial advisor for more information.
Using NI top up or a Private Pension Effectively to Improve the Forecast
Those who have pension forecasts which are low have options. Those who experience a shortfall in their NI contributions can expect to have a lower pension forecast but this can be rectified in a number of ways. One method of improving your state pension forecast is by making voluntary NI contributions (this may change with pension less based on NI in the future). Another way is to delay your retirement thus giving you an opportunity to bring your forecast up to an acceptable level. Incidentally, if plans for altering the state pension to a flat rate of £140 come to pass, the whole dynamics of the pension forecast will change forever.
Private pension contributions can raise your retirement income significantly if you discipline yourself. With changes in company pension lgislations it may be worth taking another look at your company pension scheme as well. Compulsary employer contributions will mean your company scheme may be excellent value. Take responsibility for your retirement by forecasting where you will be based on current activity, and rectifying any shortfall through new arrangements or contributions.
It would be incredibly foolish not to avail of a pension forecast. Drop into any independent financial advisor and they will help you calculate your final expected state pension, and what you are likely to receive through private and company arrangements, and so your income at retirement. Fill in one of our forms to find out more about your state forecast including ways of increasing your retirement income.