A new press release from HMRC is highlighting the fact that almost 7 million UK adults could be heading towards retirement without knowing how much State Pension they may be entitled to. New research has found that around one in eight adults (12.5%) have never checked their State Pension forecast. 

Those aged 45 to 54 are more likely than any other age group to have never checked their forecast, despite this being an important time for retirement planning. However, it is important that people of all ages check their State Pension forecast regularly rather than leaving it until retirement is approaching.

The State Pension forecast shows when someone can claim their State Pension, how much they could receive and whether there are ways to increase their entitlement. It can also be used alongside a National Insurance record to identify gaps in contributions or credits.

Where there are gaps, some people may be able to pay voluntary National Insurance contributions. However, paying voluntary contributions does not always increase the State Pension, so the forecast and National Insurance record should be checked before making a payment.

The forecast can be checked through the free HMRC app or online via GOV.UK. If you have never checked your State Pension forecast or it has been a long time since you did so, it could be worth taking a few minutes to find out what your State Pension position looks like.

Receiving tax relief on pension contributions into a workplace pension is a great way to help prepare for retirement. In addition, contributions from your employer can make the pension savings even greater. 

If you are automatically enrolled into a workplace pension a percentage of your earnings is paid into your pension fund each payday. Your employer must also contribute if you meet the automatic enrolment rules, with minimum contributions currently set at 3% from the employer and 5% from the employee, giving a total minimum contribution of 8% of qualifying earnings. Some employers also choose to contribute more than the legal minimum.

The way you receive tax relief depends on how your workplace pension operates. Under a net pay arrangement, pension contributions are deducted before Income Tax is calculated, meaning you receive tax relief automatically at your highest rate.

Under relief at source, contributions are taken after tax, and your pension provider claims basic-rate tax relief from HMRC. Higher and additional-rate taxpayers may then be able to claim extra tax relief through their self-assessment tax return or by contacting HMRC.

Some employers also offer salary sacrifice, where you agree to exchange part of your salary for an employer pension contribution. This can reduce both Income Tax and National Insurance contributions for you and your employer.

Before opting out of a workplace pension, it is worth considering the value of employer contributions and tax relief, with some care as these benefits can significantly increase your retirement savings over time.

Your State Pension forecast can help you plan for retirement by showing how much State Pension you could be entitled to, when you can claim it and whether there are ways to increase your entitlement. 

The online forecast service https://www.gov.uk/check-state-pension allows you to check how much State Pension you could receive, when you are eligible to claim it and whether you can increase your entitlement. As the State Pension age is regularly reviewed, the results of your forecast may change in the future.

You cannot use the online service if you are already receiving your State Pension or if you have delayed or ‘deferred’ claiming it. To access the forecast service, you need to sign in and may be asked to confirm your identity using photo ID, such as a passport or driving licence.

The quickest way to get a forecast is online, but you can also check by using the HMRC app. If your State Pension age is more than 30 days away, you can also complete the BR19 application form and send it by post, or contact the Future Pension Centre, which will send you a forecast.

If you are already receiving your State Pension or have deferred claiming it, contact the Pension Service if you are in the UK or the International Pension Centre if you live abroad. Reviewing your forecast regularly can help you make informed decisions about your retirement planning.