So, first of all pension calculator is an element used to calculate the projected amount of pensions paid from the Insurance Fund. It is important to remember that the amount of projected pension calculated by calculator may not be the basis for any claims.
How do you use a calculator?
Entering data into pension calculator is done through the use of information about the status of the account that you received from the Department of Social Security.
The Pension Calculator informs you when you will be able to retire and how much you will get money. The lower limits are not here considered for the age of retirement resulting from the increase of the retirement age. With this approach it is possible to simulate the projected pension of the current retirement age, as well as for increased retirement age. It should be borne in mind that politicians consider the change of retirement age to the age of 70.
If issues regarding retirements are a mystery to you, be sure to read more on the page describing how does retirement in England look like?
Of course, the exact pension in England depends on the gender and the year and month of birth, so you can also check in Calculator the increased retirement age. This calculator gives you the opportunity to choose whether you want to perform calculations in a simplified or advanced version.
Check the date of retirement on the official government website: pension calculator
1). Simplified version.
In this version the user has less freedom to make choices and it gives a smaller number of parameters. Here, it is assumed that the remuneration of the user is expressed as a percentage of the average wage in the national economy – from now until retirement it does not change.
2). Advanced version.
This version calculator gives the user more freedom to make choices, but here we must give a greater number of parameters necessary to calculate the expected age of retirement. This version also allows the user to set different remuneration – expressed as a percentage of the average wage in the national economy in different years; also it allows – by typing in some years salary equal to zero – the exclusion of years of insurance period.
Make a simulation of your own pension. I recommend you do it on website: https://www.standardlife.co.uk/c1/guides-and-calculators/pension-calculator.page
How can you live with £ 7.865 per year?
In my case it turned out that with the current income I will get about £ 7.865 of ordinary Basic State Pension. Because I have a retirement plan, and I will pay some contributions in the SIPP on my own my pension will rise to £ 11.125 per annum. Of course this is just a simulation and assumes that nothing will change. Although, it shows what will be in the future. Many people do not realize when you live to 68 years, and what awaits them. They usually start to do the first simulations when they are 50, but then it is often too late. Therefore, I am even forced to better deal with my future and to try to realize others that it is worth to take care of their own pension.
How to increase income to enjoy a decent pension?
- to increase passive income
- to work only in companies which retirement plans are run
- to buy an apartment and pay off relatively quickly, because when you will be in retirement you just won’t afford to pay the rent from rental
- develop financial skills to be able to increase the capital within the SIPP account
- invest in real estate for rent
If you want to change your future, read the article: how to save for the retirement
Please also note that the calculator uses the average life expectancy of demographic projections by Eurostat. In other versions of the calculator, the board average life expectancy was used.
Pension in the UK and its amount calculated using a calculator is the forecast amount based on the assumptions including macroeconomic assumptions and the parameter calculator given by the user. The amount of the expected pension mainly depends on the assumptions used in the construction of the calculator and the parameters set by the user of calculator. The calculated amount of the projected pension is always a gross amount – before the deduction of income tax from individuals and health insurance contributions.
The projected amount of the pension is calculated primarily on the moment of retirement and depends on future indexation and future contributions, which the amount depends on the macroeconomic assumptions adopted in the calculator and the parameters set by the user.
The amount of the notional pension is annually calculated for insured and the basis for calculating such amounts are only data relating to pension contributions and data concerning the insurance with previous years. However, the retirement calculator allows you to calculate the amount of pensions not only based on the recorded data on the account, but also based on the assumptions and parameters for future years. Here, in turn, take into account the forecasts of inflation, real wage growth, indicators of indexation and the initial capital. In addition, the user of calculator has an impact on the determination of the projected pension – it is enough that he gives future pay, the age at which he will retire. That would be enough when it comes to pension calculator. I hope that I was able to explain something.
NOTE: I present private opinions and I am not responsible for the readers' decisions. I always try to present current information but may no longer be up to date. Therefore, before making a decision, please verify them and consult a licensed financial adviser.