If you hold a pension, you’ll usually receive an SMPI once a year. It’s an illustration of the future pension that may be payable from your pension fund when you retire as well as your projected fund value at that point. The purpose of the SMPI is to keep you informed about your pension savings, and to help you plan for retirement.

The details considered when estimating your future pension are known as the ‘assumptions’. The assumptions we use for your Pension Savings account are set out by the Financial Reporting Council (FRC) in their ‘Technical Memorandum’.

What are the changes?

Fund growth rates

A new version of the Technical Memorandum, applied from 1 October 2023. The new guidance incudes change to standardise the growth rate assumptions, and the illustration of pensions payable on retirement, improving consistency between SMPIs provided by different providers.

The way that growth rates are set is prescribed, with the rate for each fund being based on its volatility. The accumulation rates that result from this prescribed approach apply to illustrations produced from 1 October 2023.

You can find more information on growth rates at How can I find out more about growth rates?

Tax-free cash

If the ‘Date of pension review’ shown on your SMPI is on or after 1 October 2023, then the income value in the illustration assumes that no lump sum is chosen when you start taking benefits. At retirement you can typically take a lump sum of up to 25% of your fund value as a tax-free lump sum.