Keeping on Top of Pension Changes with a State Pension Forecast
Published: 16 April 2012
By MoneyHighStreet Staff Leave a Comment
Updated: 16 April 2012
Public sector workers have been affected by a flurry of suggested changes and cutbacks to their pensions recently. And whether you’re in agreement that this fiscal trimming is necessary, it’s inarguable that public sector pensions are going to significantly change – probably to become less generous.
There is no universal agreement on the severity and scale of cuts, yet.
One major union, Unison, is to ballot one thousand of its members in the Principal Civil Service Pension Scheme on whether to accept the Government’s pension reforms, and the Teachers’ Union – the largest teachers’ union in the UK – combatively urges ‘mass resistance’ to the Government’s plans.
The latter warning accompanies and affirms the NUT’s resolution of ‘complete opposition to the Government’s intention to attack the national pay and conditions arrangements for school teachers’. The battle lines are still evidently drawn.
Those in the private sector have cause for grievance too and would argue that workers on state pensions are still relatively isolated from the very poor provisions in the private sector, where many people have either made threadbare contributions or simply have no coverage at all.
And this argument has been helped and fueled by recent reports from the Pension Corporation that private sector workers have to shell out ten times as much as public sector workers to receive the equivalent entitlement.
Regardless of where you stand in this debate though, it’s important for everyone to keep on top of how much they’re entitled to during these tumultuous times, through using online forums, a pension calculator, savings calculator or otherwise.
And a state pensions forecast, outlining the money that everyone should be entitled to, can help to cut through the fog that’s obscuring the financial future.
Here’s what a state pension forecast can provide and why this information’s helpful:
- The amount you will be eventually entitled to, based on current salary and contributions. This is helpful because this information reveals how much you will need to add to this amount – or not – to provide the comfortable lifestyle that retirement stereotypically affords.
- An objective view on whether your contributions are sufficient to give you the maximum state pension. This is helpful because this information reveals whether or not extra contributions are needed to breach the maximum threshold.
- A breakdown of the calculations that have been made to arrive at the forecast provided. Any erroneous calculations or assumptions can be spotted and amended straightaway.
- Alerts that focus on changes to the system and outline how they will affect your entitlement.
It is a good idea to order a state pension forecast every year or two, especially given the rapid changes and amendments that are afoot.
Obtaining a state pension forecast is a proactive step towards understanding how much your pension amounts to, but these tools are unlikely to go any way towards calming the stormy backdrop of debate and negotiation between workers, companies, unions and the government. Only time will tell on that front.