Pensions are proving a popular online search. Average monthly search volumes show people continue to be curious on all things pensions – from how much State Pension they can get to how much they’re on track to get at retirement.
Here are four of the most asked pension questions in 2024.
This article isn’t personal advice. If you’re not sure what’s right for you, ask for financial advice. Remember, pension and tax rules can change, and any benefits depend on individual circumstances. You also can’t access money in a pension until age 55 (rising to 57 in 2028).
How much is the State Pension?
We see a staggering volume of online searches around the State Pension every year, and one of the most popular questions is always how much you can get.
The full new State Pension is currently £221.20 a week with the full basic State Pension at £169.50 a week.
Under the current new State Pension system, you usually need 35 years’ worth of National Insurance contributions to get a full State Pension. Under the basic State Pension, you need 30.
Getting a State Pension forecast will show you how many years you have and if there are any gaps.
If you do have gaps, then you can either check to see if you can backdate a benefit claim covering that period which can come with a voluntary National Insurance credit.
You can also pay to fill in any gaps. You can usually fill gaps going back six years, but if you’re a man born after 5 April 1951, or 5 April 1953, for a woman you have until 5 April 2025 to fill gaps going back to 2006.
The age at which you can claim the State Pension, and how much you’ll get, is different for everyone. Download our guide to fund out:
When you can claim the State Pension
How much income you might get
What happens if you were contracted out
Ways to boost your State Pension income
Plus much more
How can I find an old pension?
It’s easy to lose track of a pension – you move house and forget to update your contact details. However, not tracking these pensions down could leave you thousands of pounds worse off.
If you’ve lost track of a pension, contact the government’s Pension Tracing Service.
All you need is either the name of your employer or your pension provider. The service can’t tell you if you have a pension with them, but it can give you contact details so you can get in touch.
How much pension will I get?
It can be difficult when you’re building up a pension to know how much income you’ll get from the size of your pension pot.
Online pension calculators can help.
You put in how much your pension’s currently worth and how much you’re contributing, and it will show you how much your pension could be worth once you retire, and how much income you could get.
Remember though, this will just be an example figure and could be different to how much you actually get.
What happens to my pension when I die?
Pension savings aren’t usually covered in a Will because they normally fall outside of a person’s estate, meaning there’s usually no inheritance tax to pay on them. However, from 2027, where an estate is valued over the inheritance tax threshold, some pensions might be subject to inheritance tax.
Who receives what’s left and how will depend on:
the type of pension you have and what you’ve done with it
whether you’ve confirmed your beneficiary preferences with your provider
your age when you die – before or after 75.
What are the pension beneficiary rules?
If you’ve left your pension untouched, you’re in drawdown or you’ve made lump sum withdrawals (also known as UFPLS), your loved ones will usually have two options when deciding how to receive your pension wealth.
The inheritance can be passed on as a cash lump sum and paid into their bank account(s), or they can convert the pension into their own name(s).
If your beneficiaries convert the pension savings into their own name, they can choose to exchange the value for a secure income (an annuity), or keep it invested (through drawdown).
An annuity will normally pay a regular, secure income for the rest of their life. Drawdown allows them to keep the pension invested and withdraw an income as and when they like. With drawdown they may also be able to pass on anything that’s left to future generations when they die.
What happens to my pension annuity when I die?
If you choose to exchange your pension for a lifetime annuity, payments will stop when you die, unless you choose certain options at the start of the contract.
You can’t usually change the terms of your annuity once it's set up, so make sure you’re aware of all your options before you apply.
These options allow you to pass on your annuity as a cash lump sum or regular income payments to your spouse, partner, other beneficiaries, or your estate depending on the option you choose.
What happens to my State Pension when I die?
State Pension payments will usually stop once the Pension Service has been informed of your death.
Your spouse or civil partner might be able to inherit some of your payments or increase their State Pension payments based on your National Insurance record. But the possibilities here will depend on, among other things, your State Pension ages and the date of your marriage/civil partnership.
What you do with your pension is an important decision that you might not be able to change. You should check you're making the right decision for your circumstances and that you understand all your options and their risks. The government's free and impartial Pension Wise service can help.
If you think you could benefit from getting expert financial advice from a professional, start by booking a call with our advisory team today.
You won't get personal advice on the call, but they'll talk you through the advice service we offer, including charges and connect you with an adviser if you'd like to go ahead.
Our advisers can recommend how you can make the most of your tax allowances through financial planning. But if you need complex tax calculations, your adviser might recommend you speak to an accountant to complement their advice.