Pension statement assumptions
The estimate shown in your pension statement is the pension you could get from your pension fund or your AVC fund at your target retirement age, if you choose to buy an annuity.
You don’t have to buy an annuity, but by law, we need to show you how much income you might be able to get if you do.
This estimate is shown in today’s money, assumes an age-related annuity rate and that:
- you remain in the Plan until your target retirement age
- you continue to pay contributions at your current rate
- any AVCs you’re paying continue at the same rate
- you don’t choose to take a lump sum at retirement
- you remain invested in the same investment funds until your target retirement age
- you’re not subject to any HMRC restrictions when you take your benefits
- your earnings increase in line with price inflation at 2.5% a year
- your pension at retirement will:
- not include any spouse’s pension
- be guaranteed for five years after your retirement date
- not increase each year.
Investment return assumptions
We’ve made the following assumptions about future investment returns.
| Fund | Average return before retirement | Allowance for expenses |
|---|---|---|
| Lifestyle funds | ||
| Accelerated growth fund | 6% | 0.13% |
| Moderate growth fund | 4% | 0.20% |
| Pre-retirement fund | 4% | 0.16% |
| Annuity focused fund | 6% | 0.14% |
| Cash fund | 2% | 0.13% |
| Self-select funds | ||
| AAA-AA-A corporate bond all-stocks fund | 4% | 0.15% |
| Accelerated growth fund | 6% | 0.13% |
| Amanah fund | 6% | 0.23% |
| Annuity focused fund | 6% | 0.14% |
| Cash fund | 2% | 0.13% |
| Ethical global equity fund | 6% | 0.30% |
| Moderate growth fund | 4% | 0.20% |
| Property fund | 4% | 0.70% |
| UK equity fund | 6% | 0.10% |
| World emerging markets equity fund | 6% | 0.34% |
| World equity fund (hedged) | 7% | 0.15% |
| World equity fund (unhedged) | 6% | 0.13% |