New growth rates

From 1 October 2023, all UK pension providers will use one of four new growth rates: 1%, 3%, 5% or 7%. These rates are set by our regulators the FRC, and from 6 April 2024 have changed to 2%, 4%, 6% or 7%. The percentage is based on how much and how often the price of your pension investments has changed over the last five years.

All UK pension providers will work out which growth rate to use in the same way.

What changes might I see?

The numbers in your pension statements after 1 October might look a little different from those you’ve had in the past.

What your pension savings could give you at retirement could look higher or lower than before. This is because the growth rate used for the estimate could be higher or lower than the ones used for earlier statements.

  • If a lower growth is used, what your pension savings could give you at retirement could be lower.
  • If a higher growth rate is used, what your pension savings could give you at retirement could be higher.

Keep in mind this only impacts how we estimate what your pension savings could give you. It doesn’t change how your investments will actually perform or how they’re managed.

Your questions answered 

Here are answers to questions we’re often asked about how we estimate future pension values.

Does this change mean my pension savings will be worth more or less when I retire?

The amounts for what you could get at retirement in your statement are only estimates. How much your pension savings will actually be worth when you retire depends on several things, like how much you and your employer pay into your pot, the charges on your pension, and how your pension grows.

Does this change mean I’ll get more or less income from my pension savings when I retire?

The amounts for what you could get at retirement in your statement are only estimates. How much income you’ll actually get when you retire depends on how much you have saved when you come to retire and how you choose to take your pension savings.

Will the online pension tools and calculators be changing to show these changes?

Yes, we’re updating our online pension tools and calculators affected by these changes.