HMRC Pension Alert:Â Planning for retirement may seem like something that can wait, but today’s simple check could tell you one key thing about your finances down the line. Research commissioned by HM Revenue & Customs suggests approximately one in eight UK adults have never looked at their state pension forecast, and the percentage who never check rises significantly for adults aged 45 to 54. HMRC is urging people to check where they stand and whether they could improve their future retirement income.
How many people have not checked their state pension forecast?
Research commissioned by HMRC found that around 12.5% of UK adults have not checked their state pension forecast. The survey, conducted by Censuswide among more than 5,200 people in February and March, also found that people aged between 45 and 54 were particularly unlikely to have reviewed whether their pension was on track. The findings have been highlighted during Pension Awareness Week, which runs from September 15 to 18.
Why should people check their state pension forecast?
Checking a state pension forecast can give people a clearer idea of the income they could receive in retirement and help identify potential gaps in their National Insurance record. HMRC says the process can be completed within minutes through its app, while information is also available through the government’s online services. Reviewing the forecast earlier can give people more time to consider their options rather than discovering a shortfall close to retirement.
Can you increase your state pension if there are gaps?
For people who have gaps in their National Insurance record, there may be circumstances in which they can improve their eventual state pension by making additional contributions. Financial experts cited in the report noted that people generally need 35 qualifying years to receive the full new state pension, while gaps can typically be filled for the previous six tax years, subject to eligibility and the applicable rules. This makes checking the forecast particularly useful because it can highlight whether further action may be worthwhile.
What else should people consider when planning for retirement?
The state pension is therefore one of the sources of retirement income, and advisers have suggested people consider it with work pensions and savings and investments. A projection is a good place to start in understanding future income, advisers say, but taking a wider view on retirement finances could help people understand whether they already have enough in place for their plans. Moreover, according to the financial advisers, you should keep checking pension arrangements in your 40s and 50s, so that you can make changes if needed.
Disclaimer: This article is intended for general informational purposes and is based on publicly available information from HMRC and reporting by The Independent. Pension eligibility, National Insurance records and voluntary contribution rules can vary according to individual circumstances. Readers should check their personal forecast through official government services and seek regulated financial advice where appropriate before making financial decisions.
