Here are the most popular pension questions and the correct answers so you're not sucked into a Google search rabbit hole.
The term ‘state pension’ was keyed into Google a staggering 6.5 million times in the past year. However, once related search terms such as ‘Pension Credit’ was factored in, searches reached in excess of 7.5 million.
Meanwhile, around 784,000 searches were made on annuities, and savers searched for self-invested personal pensions (SIPPs) almost 717,000 times.
According to Hargreaves Lansdown’s analysis of Google data on pension related questions, there were also around 630,000 online searches around how much money you need for retirement.
However, while it’s encouraging that people are seeking more information on pensions, the investment platform warned that the web could present readers with out-of-date and inaccurate information.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Retirement is a complex area, beset by myths and confusion that can get in the way of people really engaging with their pension planning.
“There is information everywhere but knowing where to go to get guidance you trust can be hard to identify. Going online for instance can bring up a whole host of out-of-date and inaccurate information that could cause you problems if you based your retirement decisions on it. However, the internet remains an important source of information with millions of searches every year on key retirement issues.”
Morrissey added: “There are great government sources in the form of the Moneyhelper website and the Pension Wise service, which delivers telephone and face-to-face guidance sessions for the over 50s. You may also choose to go down the regulated financial advice route to get recommendations targeted to your specific needs. Accessing the right support at the right time can make a huge difference to your retirement.”
The top five pension queries
Here are five of the most common retirement questions asked online, with answers supplied by Hargreaves Lansdown:
1) How much do I need to retire?
According to the Pensions and Lifetime Saving Association (PLSA), a minimum standard of living – an income that covers basic needs with a small amount left over for things like occasional meals out – would equal £12,800 per year for a single person and £19,900 for a couple.
For more flexibility, such as the ability to run a car or go abroad on holiday every year, a moderate standard of living will cost around £23,300 per year for a single person and £34,000 for a couple. This means accumulating a pension pot of £121,000 each.
Meanwhile a comfortable retirement with more holidays, theatre trips and so on is going to cost £37,300 for a single person and £54,500 per year for a couple. This requires each partner’s pension to stand at £328,000.
2) How much state pension will I get?
The full new state pension for those who retired from 6 April 2016 onwards is currently £203.85 per week. To qualify for any state pension at all, you need to have ten years of national insurance contributions on your record and for the full amount, you need to have 35 years’ worth.
To check how much you’re on track to receive, visit the government’s state pension forecast page. It will also highlight any gaps in your record that may need to be filled.
3) What is a SIPP?
It is a self-invested personal pension plan and differs to other plans by allowing you to manage and choose your investments. In other personal and workplace pensions members will often rely on the pension provider to decide where they are invested, via a default fund. With a SIPP, the choice is yours, and the plan offers a wider range of investments than other personal and workplace pensions do.
4) What is an annuity?
An annuity is an insurance product that lets you exchange your pension savings for a guaranteed income for life. Once bought they cannot be unwound and so it’s really important to make sure it’s right for you, and to include as much information as possible in your application to make sure you get the annuity that best meets your needs.
For instance, you can get annuities that will continue to pay out an income to your spouse when you die – these are known as joint life annuities. You can also get an enhanced annuity that takes account of your health and lifestyle, and you may get an increased income as a result.
5) How long does my pension need to last?
Recent data from the Office for National Statistics (ONS) showed the number of people living beyond 100 years old is rising. According to the Census in 2021, there were 13,924 people aged 100 or older living in England and Wales – a 24.5% increase from the previous data in 2011.
Babies born in 2021 have a life expectancy at birth projected to be nearly 90.5 years for females and almost 87.6 years for males so you could potentially be living for 30 or more years in retirement.
