When you view your pension, you will see an estimate of your pension in three economic situations. This means you can see how your pension may change until your state pension age. You will see the following three situations:
- If things are very unfavourable
The economy is developing unfavourably. Returns are disappointing or prices are rising rapidly. Here, you can see what your pension could be if the economy is performing unfavourably.
- Expected
The economy is performing averagely. This is the medium scenario. The chances of receiving a higher or lower pension are about the same.
- If things are very favourable
The economy is developing favourably. Returns are higher than average. Here you can see what is possible if the economy is favourable.
Economists have been considering what might happen to the economy in the future. They calculated 2,000 possibilities. The amount under 'Expected' is the outcome that occurred most often. The probability that your pension will be higher than this medium amount is 50%. There is also a 50% risk that your pension will be lower than this amount.
The probability of your pension being higher than the highest amount is 5%. And the probability of your pension being lower than the lowest amount is also 5%. So this risk is very small. The likelihood of you receiving one of these amounts (or even less or more) is therefore very small. They are extreme outcomes. Nor is it the case that your expected pension will suddenly jump to the lowest or highest amount.
The estimate of your pension and the three amounts will change. As you get older, these amounts usually fluctuate less. The three amounts therefore become increasingly closer to each other.
What do these amounts mean and what can you do with them?
The amounts are not predictions or commitments. They show what can happen under different economic conditions. This shows that your pension may change because of what happens in the future.
