Track and trace

Understanding how your pension is performing over time can help you stay informed about your retirement income. The way you monitor and review a pension depends on the type of pension you have.

This matters whether you’re currently serving, have previously served, or are part of the armed forces community – such as a spouse, partner or family member – because the types of pensions you hold may differ.

Monitoring your armed forces pension.

If you are currently serving as a regular or reservist, you will normally build up benefits through the Armed Forces Pension Scheme (AFPS). AFPS is a defined benefit scheme, which means:

• you do not choose investments,
• you do not pay management charges
• and you cannot transfer or consolidate AFPS into a personal pension.

Your benefits are based on your service and scheme rules, rather than investment performance.

If you need a detailed picture of your armed forces pension, you can request a formal pension forecast, whether or not you are currently serving. A formal pension forecast provides an estimate of your benefits at a future exit date, which can be helpful when planning if or when you may want to leave service or retire.

You are normally entitled to one free forecast per year. Information on how to request a forecast can be found on gov.uk.

Serving personnel also receive a Benefits Information Statement, or BIS, each year via JPA. This is an automated statement issued around your birthday that summarises the pension benefits you have earned to date, any Early Departure Payment (EDP) entitlements, and potential death-in-service benefits.

It’s important to note that this is not a forecast of what you will receive at departure, if you are entitled to immediate benefits at that point.

Monitoring civilian and personal pensions.

Many people in the wider armed forces community may also have defined contribution pensions, including:

• reservists with civilian employment
• veterans working in civilian roles
• spouses and partners
• regulars who have previously worked civilian jobs
• people who are self-employed

It is important to review your pension statements at least annually to see if contributions are on track and whether your investments align with your risk tolerance. When it comes to your risk tolerance, consider your financial and emotional capacity to tolerate the risk of your investments falling in value. You can learn more about your risk tolerance in another of our videos, in the investment module.

Investment performance can have a big impact on the value of your pension, but so can charges. Different pension providers charge different fees, typically from 1.5% of your investments at the top end down to 0.3% at the lower end. Small percentage differences can have a big impact over the years, especially considering the length of time you’ll have the pension.

For example, if your pension is worth £30,000 and your provider has a 0.75% management fee, you’d pay £225 a year. But if you switched to a provider charging 0.5% a year, you’d pay £150, saving £75 a year.

Over several decades this isn’t just about the total sum spent on fees, but also what the savings could have earned you through compounding.

Pensions can become complicated, particularly for those who own a business or have multiple pension pots. In these instances, you may want to consider taking financial advice before making any big decisions.

You may also want to consider consolidating old personal or defined contribution pensions to make them easier to monitor, get better investment options or lower the charges. Some modern pensions may give more flexible drawdown options too.

However, some older pensions have unusual rules or guaranteed benefits that means you may lose valuable features by transferring out. For example, you may have early retirement options. This could allow you to start taking your pension earlier than the standard retirement age, sometimes with reduced penalties or better terms than modern pensions.

You may have guaranteed annuity rates which lock in a very favourable income rate for life when you buy an annuity, often far better than current market rates. Be aware, scammers do sometimes offer “early access” to pensions before age 55 or 57 from 2028, which is usually illegal and can result in big tax charges.

Keeping some schemes separate may be wise if they hold unique benefits. Also, look for exit penalties if you transfer out. Compare the costs of the new scheme against the cost of keeping your existing ones.

Consolidating or transferring a defined benefit or final salary scheme, which provides a guaranteed income for life, is usually not recommended. You would also have to take financial advice if the defined benefit pension is worth over £30,000.

If you are not yet taking money out of an armed forces pension, you can transfer it under certain circumstances, but generally transfers can only be made to another defined benefit scheme. It’s recommended to get advice from a regulated financial adviser or contact the Armed Forces Pension Scheme administrators for specific guidance.

Finally, if you’ve lost touch with a pension provider, either by losing the paperwork or moving home, they won’t know how to pay you when you retire. You can use the government’s free pension tracing service on gov.uk to find all your pensions, so you don’t miss out on valuable retirement income.

It helps you find the contact details of current and old workplace pensions, as well as personal pensions. You’ll need to pull together as much information as possible. Try to find your employer or pension provider name, the rough dates that you worked there and any old paperwork if available. This might include pension policy numbers, old employment contracts, payslips showing pension deductions, and annual pension statements.

If you’ve lost the paperwork, you may need to contact previous employers or ask former colleagues for the pension provider’s name. If your former employer has closed down or gone bust, you could see if it appears on the Pension Protection Fund’s list of schemes they look after.

The government is working on Pensions Dashboards, which will allow individuals to see their pensions information, including their State Pension, for free in one place online at a time of their choosing. Pensions Dashboards will also reunite savers with lost or forgotten pensions.

The ability to access information easily, alongside an increase in individuals’ awareness and understanding of their pension information, could also support people with better planning for their retirement. However, it’s not gone live yet for the public.

It’s easy to lose track of pensions, especially if you’ve worked in different roles over your career. But keeping an eye on your pension doesn’t have to be complicated. There are lots of tools available to help you, like the government’s pension tracing service if you’ve lost track of any old pots.

If you’re ever unsure, especially with complex schemes, it’s worth seeking professional advice before making big decisions. Taking small steps now will help you feel more confident and make the most of your pension when you need it.