I have a deferred pension due on my 65th birthday.

What time scale before this date should I expect to receive details of what the pension will be going forward? 

Is there any legal requirement on timescales, or best practice, for getting a clear understanding of what information a person should get from a pension provider.

Nick

Rachel Vahey, AJ Bell Head of Public Policy, says:

When you are working out how to take an income in your later years, it goes without saying it’s important to have all the correct and up-to-date information at your fingertips. Without it, it’s difficult to make plans and take decisions.

Pension providers are required by law to send you information at different points of your pension journey, so it’s worth setting out what your pension providers need to tell you and when.

If you have a defined contribution (DC) pension – such as a SIPP or a workplace master trust – then the pension provider usually has to send you an illustration each year.

This generally sets out how much you have in your pension pot and what your pension may be worth in today’s money when you reach your selected retirement age.

When working this out, the pension scheme has to assume you won’t be taking any tax-free cash and that you will be buying an annuity.

Of course, you have freedom to do what you want: the amount is just an illustration, but it should give you an idea of what your future income from the pension could be.

If you have a defined benefit (DB) scheme – where the amount you receive depends on your salary and the number of years you have been in the pension scheme – and you are still building up benefits (in other words you are an ‘active’ member), the scheme has to send you information about how much you have built up so far and what your potential pension income could be.

If you are no longer building up benefits (you are a ‘deferred’ member), then there is no requirement for the scheme to send you information, but you can request the information free of charge once in any 12-month period.

When you start to approach retirement, pension providers have to send out other information. A SIPP will start to send you information in a ‘wake-up’ pack from age 50, and then every five years after that.

This will set out your options when accessing your pension pot and is designed to get you thinking about what you might want to do. The SIPP provider will also send you a pack of information six months before your selected retirement date or when you request to access your pension.

If you have an occupational scheme – such as a master trust or a defined benefit scheme – then your provider has to send you information about your pension six months before your normal retirement date.

This will set out how much you have in your pot and your retirement options, or, in the case of a defined benefit scheme, it will set out the value of your pension built up, and if relevant how you can exchange some of it in return for a tax-free cash lump sum. It will also cover when it will start paying the pension.

As you can see, most of us can therefore expect a mountain of ‘paperwork’ from pension providers, although some people may have lost touch with their pension provider, in which case the provider will be unable to send this out.

However, there is good news on this front. The government is designing a ‘pensions dashboard’ which will give you an overall picture of all your pensions, where they are, how much they are worth and when they are expected to start.

Once we get this dashboard – expected in the next two years – it will take a lot of the pain and guesswork out of understanding what sort of pension income you can expect.

Until then, if you want to track down the contact details of any pension plans you can try the government pension finder by accessing this link.

DO YOU HAVE A QUESTION ON RETIREMENT ISSUES?

Send an email to askrachel@ajbell.co.uk with the words ‘Retirement question’ in the subject line. We’ll do our best to respond in a future edition of Shares.

Please note, we only provide information and we do not provide financial advice. If you’re unsure please consult a suitably qualified financial adviser. We cannot comment on individual investment portfolios.

‹ Previous2025-05-29Next ›