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State Pension, how to calculate it

How do you know what state pension you will receive at your retirement date?

  1. Request your state pension statement (this is free to obtain, call 0800 7310175).
  2. Whatever it is (let's say it's the maximum £164.35 - actually it could be more if you had a higher pension in 2016 that is subject to 'Protected Payment' rules) then divide this amount by 7, and then multiply by 365.25, to give yourself an annual income figure.
  3. This is the amount you would receive today if it was your retirement date, but what is you retire in 20 years?
  4. The pension will increase by a minimum of 2.5% per year. Because the amount is compounded every year, put 1.025 and save it on the memory button on your calculator, then put in 164.35 and multiply it 20 times by 1.025 (or by repeatedly hitting the memory button!).
  5. This will give you your annual income figure at your state pension age (it is likely to be more, for example last year the growth figure used was almost 3% because of the Triple Lock rules).



While we keep information on the website as up to date and as accurate as possible, the information on this website does not form part of our advice process. Cambridge Pensions Ltd cannot accept any liability for any decisions made by a client or member of the general public based on any information contained on this website. The value of your investments can go down as well as up and you may get back less than has been paid in.

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