What does ‘projected pension pot at retirement’ mean and why is my projected pension pot value higher than last year’s value?

Pensions are long-term savings and your projected pension pot at retirement depends on factors such as annual contribution increases, inflation and how and when you access your pension pot.

When we provide a projected pension pot value (either via your account, online or within our app, or in your annual statement) to illustrate what you might receive when you access your pension, we must make a number of assumptions on the factors above.

All providers follow the same regulations when it comes to how projections are calculated and displayed. This is to make it easier for you to compare all your pension pots across providers.

  • One of the key assumptions is how your investment funds might perform in the future as well as taking into account limits set out by our regulators. This is known as the ‘investment growth rate’.
  • Each year, in accordance with the rules set by the regulators, we review the performance of our funds and categorise them into 4 different groups. These are based on how much, and how sharply, the funds’ prices have moved up and down (their volatility) over the last 5 years. These groups will determine the new growth rates that are used in projected illustrations for the following year. If the growth rate rises for the fund(s) you’re invested in, then it’s likely that your projected pension pot value will be higher than the year before.

It’s important to be aware that:

  • these are just estimates of what might happen
  • the actual growth achieved by the funds may be higher or lower
  • any projection given is for guidance and is not guaranteed
  • we haven’t made any changes to the way we manage your investments.

If you’d like a more detailed projection, which provides full details of the assumptions used, or a projection on a different basis, please contact us.

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