Give Yourself a Pension Healthcheck

When did you last actually look at your pension? If you're like most people, the answer is "when I started the job" or "never properly." That's a problem — because small issues now become enormous problems at retirement.

Here's a 20-minute pension healthcheck you can do right now.

Step 1: Know What You've Got (5 minutes)

Before anything else, gather your current numbers:

• State Pension forecast — check at gov.uk/check-state-pension
• Workplace pension value — log into your provider
• Any other pensions — SIPPs, old workplace pensions, personal pensions
• ISAs and savings — your non-pension retirement money

If you don't know where to find these, read our guide on how to find your pension numbers first.

Step 2: Are You Contributing Enough? (5 minutes)

The Rule of Thumb

A widely used guideline: take half your age when you started saving and contribute that percentage of your salary. Started at 25? Aim for 12.5% (combined employee and employer contributions). Started at 35? Aim for 17.5%.

This is rough — but it's a useful sanity check.

What Counts

Your total contribution includes:

• Your employee contribution
• Your employer's contribution
• Any salary sacrifice uplift
• Tax relief added by HMRC (for non-salary-sacrifice schemes)

Example: You earn £40,000 and contribute 5% (£2,000). Your employer matches at 3% (£1,200). Total: 8% (£3,200/year). If you started saving at 30, the rule says you should be at 15%. You're significantly under.

Auto-Enrolment Minimum

The legal minimum is 8% (5% employee, 3% employer). This is widely considered not enough for a comfortable retirement. It's a floor, not a target.

The Compound Interest Effect

This is where pensions become either magical or terrifying, depending on when you start:

Starting 10 years later roughly halves your pot. To catch up at 45, you'd need to contribute double what a 35-year-old puts in.

Step 3: What Are You Invested In? (5 minutes)

Most people never change their pension investments from the default fund. That's not always wrong — many default funds are reasonable — but it's worth checking.

Key Questions

What's the fee?

• Under 0.5% is good
• 0.5-0.75% is acceptable
• Over 1% is expensive — consider switching providers or funds
• Fees compound just like returns. A 1% fee vs 0.3% can cost you tens of thousands over a career

Is the risk level right for your age?

• In your 20s-40s: higher equity allocation (70-100%) makes sense — you have time to ride out crashes
• In your 50s: start thinking about some diversification
• Within 5 years of retirement: consider whether your provider's "lifestyle" or "target date" fund is gradually reducing risk

Is it a lifestyle/target date fund? Many default funds automatically shift from higher-risk to lower-risk investments as you approach retirement. Check when this starts — some begin de-risking 10-15 years before retirement, which may be too early if you plan to use drawdown rather than buy an annuity.

Step 4: Will It Be Enough? (5 minutes)

This is the big question. Here's a quick check:

The Income Replacement Method

Most guidance suggests you'll need 50-70% of your pre-retirement income in retirement (your mortgage may be paid off, you won't pay NI or pension contributions, commuting costs disappear).

Quick calculation: 1. Your current salary: £___ 2. Target replacement (e.g., 60%): £___ 3. Minus State Pension (~£12,000): £___ 4. Gap your pension needs to fill: £___ per year 5. Multiply by 25 (rough years in retirement): £___ 6. Compare to your current pension pot + future contributions

This is very rough. Our calculator does this properly with year-by-year projections, inflation, and investment returns.

The Spending Method (Better)

Instead of income replacement, work out what you actually spend:

1. Check bank statements for 3 months 2. Multiply by 4 for annual spending 3. Remove work costs (commuting, work clothes, lunches out) 4. Add retirement costs (more leisure, holidays, hobbies) 5. That's your real target

Red Flags to Watch For

🚩 You're Only Contributing the Minimum

8% total (including employer) is very unlikely to fund a comfortable retirement, especially if you started after 30.

🚩 You Don't Know Your Pot Value

If you genuinely don't know within £10,000 what your pension is worth, that's a problem. Log in today.

🚩 High Fees on Old Pensions

Pensions from the 1990s and 2000s often have fees of 1-1.5% or higher. Modern pensions typically charge 0.2-0.5%. That difference compounds massively over decades.

🚩 You Have Pension Pots You've Forgotten About

Lost pensions earn returns for nobody. Use the Pension Tracing Service to find them.

🚩 You're Not Using Salary Sacrifice

If your employer offers salary sacrifice for pension contributions, use it. You save National Insurance (13.25% on earnings between £12,570-£50,270) on top of income tax relief. That's free money.

🚩 Your Employer Matches More Than You're Using

Some employers will match contributions up to a certain level (e.g., "we'll match up to 6%"). If you're contributing 3% and they'd match 6%, you're leaving free money on the table.

What to Do Next

Based on your healthcheck:

If you're on track: Great. Check again next year. Make sure you're not paying excessive fees.

If you're behind: Increase contributions. Even 1% more of your salary makes a significant difference over 10-20 years. Many people can find 1% by cutting something they don't notice.

If you're significantly behind: Don't panic, but do act. Options include: increasing contributions aggressively, working a few years longer, reducing planned retirement spending, or a combination. Get proper advice if the gap is large.

If you have no idea: Start with our calculator. Enter what you know and see what comes out. Even a rough plan is infinitely better than no plan.

Our retirement calculator turns your pension numbers into a clear year-by-year picture. Check if you're on track.