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 — and what to do with the information.

1. The current fund value

The most prominent number — the current cash value of your pot. It fluctuates with investment markets, so don't anchor to a single figure. What matters is the trend over time and whether contributions are flowing in correctly. Check both your contributions and your employer's contributions are appearing as expected.

2. 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 up to a certain level, and if you contribute more than the match threshold, the employer contribution stays capped. The Pension Calculator lets you model the impact of changing your contribution rate.

3. The projected retirement figure

This is where statements most mislead people. The projection shows what your pension might be worth at your selected retirement age — based on assumed investment growth rates (typically 2%, 5%, and 8% per year). These are illustrations, not forecasts. Key things to check:

• Which growth rate is the headline figure? The 5% or 8% projection looks very different from the 2% projection. Statements are required to show multiple scenarios.
• Is it in today's money or future money? Real-terms projections (adjusted for inflation) are more useful for planning than nominal figures that include inflation.
• Does it include the State Pension? Many projections show pension pot income only, not the full picture. Add your expected State Pension to get your total retirement income.

4. Fund charges

Expressed as an Annual Management Charge (AMC) or Total Expense Ratio (TER), usually shown as a small percentage such as 0.40% or 0.65%. This looks small but compounds significantly. Charges on auto-enrolment workplace pensions are capped at 0.75% by law. If your charges are above this, check whether you are in a legacy scheme that may be exempt from the cap.

Illustrative. Even small charge differences compound to tens of thousands of pounds over a working lifetime.

5. Investment fund details

Your statement will show which fund(s) your pension is invested in. Most people are in their provider's default fund, which is fine — but worth reviewing as you approach retirement. Many default funds use a 'lifestyling' strategy that automatically shifts from equities to bonds and cash in the years before your selected retirement date. If you plan to take drawdown rather than buy an annuity, this automatic de-risking may reduce your pot unnecessarily. Consider switching to a drawdown-appropriate fund 5–10 years before you plan to stop working.

6. Transfer value and tracing old pensions

For defined contribution pensions, the transfer value is simply the fund value — the amount you'd receive if you moved the pension elsewhere. For defined benefit (final salary) pensions, the Cash Equivalent Transfer Value (CETV) is a complex actuarial calculation and is typically much larger than accumulated contributions. Transferring a DB pension requires regulated financial advice and should not be done without it.

If you have worked for multiple employers and suspect you have old pensions you've lost track of, the government's free Pension Tracing Service (gov.uk/find-pension-contact-details) can locate them using your previous employer's name.

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 Pension Calculator and the Pension Gap Simulator to see if your current trajectory closes the gap.