In 2026, Pension Awareness Day falls on 15 September. In honour of the event, keep reading for a look at some simple pension facts you should know, whether you’re approaching, at, or already in retirement.
From the value of the State Pension and how to track lost pension pots to managing retirement budgeting, these 10 facts will help you engage with and understand your pension in the run-up to 15 September.
Pre-retirement
1. The normal minimum pension age is 55 but rising
The normal minimum pension age is rising to 57 in April 2028.
If you planned to retire at 55 and will now need to wait another two years, revisit your plans, if you haven’t done so already. You might opt to finish work and rely on alternative income sources like ISAs or a buy-to-let portfolio, or push your retirement back.
Remember, your retirement income must last for the rest of your life, so if your retirement date is years away, don’t allow this change to panic you into a rash decision. Stay calm and stick to your plan.
2. You can claim extra tax relief as a high earner.
Your tax-efficient pension contributions generally benefit from automatic basic-rate tax relief at 20%. But as a higher- or additional-rate taxpayer, you can claim an extra 20% or 25%, respectively, via Self Assessment.
This means that £100 in your pension fund costs you just £60 as a higher-rate taxpayer and just £55 if you pay the additional rate. Actuarial Post confirms that between 2016/17 and 2020/21, £1.3 billion in tax relief was left unclaimed by high earners.
3. Your auto-enrolment minimum contribution might not be enough
Auto-enrolment was introduced in 2012 as a way to encourage UK workers to save into a pension.
The measure also introduced a minimum contribution level, set at 8%, with at least 3% coming from your employer and 5% coming from you (including tax relief). But it’s important to remember that this amount won’t necessarily provide you with your desired retirement lifestyle.
Speak to us to find out more about your current financial position and whether you’re on track to reach your long-term goals.
4. The full new State Pension rises each year
Most of your retirement income will likely come from your private or workplace pensions, but the State Pension shouldn’t be overlooked. Thanks to the triple lock, it rises each year in line with the higher of:
- The rate of inflation
- Average wage growth
- 2.5%.
For 2026/27, the full new State Pension stands at £241.30 a week (or approximately £12,548 a year).
At retirement
5. It’s easy to track lost pensions
The Pensions Policy Institute suggests there are almost 3.3 million unclaimed pension pots in the UK, amounting to more than £31 billion in “lost” funds. Thankfully, it’s relatively easy to begin tracking lost pensions.
Start by sorting through your old paperwork. Contact any previous employers if you have contact information, or use the government pension tracing website, which could help if a firm has been taken over or changed its name.
You make the best pension decisions when you have all the information, so start your search now.
6. You have multiple retirement options
Broadly speaking, when you retire, you can choose between a traditional income in the form of an annuity or more flexible options that give you greater control but more budgeting responsibility.
An annuity might be a good option to cover known and regular expenses, and MoneyWeek reports that annuity rates rose by 5.4% during 2025. But you’ll likely want flexibility too.
Drawdown allows you to decide when and how much you withdraw, so you might find a mixture of both options works best.
In retirement
7. Longevity means that budgeting is important whichever option you choose
The latest Office for National Statistics figures confirm that UK life expectancy at birth is 79 for men and 83 for women, rising to 83.7 and 86.2 for those aged 65 in 2022-2024.
As life expectancies rise, retirement can reasonably be expected to last 20, 30, or even 40 years. That means budgeting is key.
8. Outside factors can affect the value of withdrawals
Inflation will likely diminish the spending power of your annuity income over time. If you choose drawdown, it’s especially important you factor your potential longevity into the withdrawals you make.
Inflation can affect the real-terms value of your income, but other outside influences matter too. Stock market dips can force you to sell more units to realise the same withdrawal amount. The unexpected can also strike at any time, meaning an emergency fund is key.
9. It’s your money, so don’t be afraid to spend
Remember that your pension is your hard-earned money, so don’t be afraid to spend it. Retirement is a time to relax, make memories, and experience new things, so you should never feel guilty about pursuing the things you love.
Budgeting isn’t about being prudent so much as it’s about understanding the opportunity your years of careful planning open up to you.
10. It’s never too early to think about legacy
Today’s Wills and Probate reports that once pensions come into scope for IHT in April 2027, the effects of late estate planning could be significant. If the UK’s wealthiest 10% delay estate planning by 20 years (starting at 70 rather than 50), they could see their Inheritance Tax (IHT) bill increase by £397,000. The figure under existing rules is still a huge £258,000.
Starting early allows you to make best use of tax-efficient strategies, reliefs, and allowances, so get in touch now.
Get in touch
If you’re looking for an independent financial adviser in Milton Keynes or Olney, look no further. At Jane Smith Financial Planning, we’ve been helping clients for 30 years, so contact us at info@janesmithfinancial.com or call 01234 713131 to see what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
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