Pensions 5 min read • March 2026

How to read a pension statement — the numbers that actually matter

Most pension statements get opened, skimmed, and filed. The numbers feel abstract and the projections look either reassuring or alarming with no clear action attached. Here is what each section actually tells you.

The current fund value

This is the most prominent number — the current cash value of your pot. It fluctuates with investment markets, so don't anchor to it. What matters is the trend over time, not the figure on any single statement.

Contributions breakdown

Your statement should show: your contributions, your employer's contributions, and tax relief added by HMRC. If the employer contribution looks lower than you expected, check your scheme rules — some employers only match if you contribute above the minimum.

The projection figures

Most statements include projected pension income at retirement age — usually showing three scenarios (low, medium, high growth). These projections use standardised FCA growth rate assumptions, not the actual performance of your fund. Treat them as directional rather than precise.

💡 The transfer value

Some statements include a transfer value — the amount you'd receive if you moved the pension elsewhere. For defined contribution pensions this is usually close to the fund value. For defined benefit pensions, it's calculated differently and can be much less than the implied value of the guaranteed income.

Fund name and charges

Look for the fund you're invested in and its Annual Management Charge (AMC) or Total Expense Ratio (TER). If you're in a default fund, this is typically 0.20–0.75%. Above 1% for a default fund is worth questioning. The statement should also show total charges deducted in the year.

Lifestyling — what it means and whether it applies to you

Many default funds use 'lifestyling' — automatically switching from growth (equity) assets to lower-risk (bond/cash) assets as you approach retirement. This protects the pot if you plan to buy an annuity. If you plan to take flexible drawdown instead, lifestyling may work against you by reducing returns unnecessarily in the final decade. Check whether your default fund uses lifestyling and how it's set up.

What to actually do after reading it

Three checks worth making: (1) Is your expression of wishes form up to date? (2) Are your contributions enough to hit your retirement income target? (3) Are the fund charges reasonable? Run your numbers in the and the to see if your current trajectory closes the gap.