How are growth rate changes affecting my pension or investment?

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You can find out below how projection changes affect your particular pension or investment product.

Please remember that projections aren't guaranteed and what you get back depends on the performance of the fund(s) you're invested in.

The figures, including fund growth rates on your statement or annual review, are adjusted for inflation, which means we’ve assumed a reduction of 2.50% a year until your retirement date. There are exceptions where the fund growth rates shown on your statement or annual review stay based on nominal growth rates that aren’t adjusted for inflation. These are:

  • Drawdown pensions, the nominal growth rates shown are reduced to:
    Low-growth rate 2.00%
    Mid-growth rate 5.00%
    High-growth rate 8.00%
  • ISA/Life, the nominal growth rates reduced to:
    Low-growth rate 1.50%
    Mid-growth rate 4.50%
    High-growth rate 7.50%
  • The maximum mid growth rate that can be used in pensions illustrations - other than statutory money purchase illustrations - is 5.00% and for ISA/LIfe illustrations is 4.50%

Select a subject:


Phased plans and Retirement Control Funding Accounts

  • The figures on your yearly statement are inflation-adjusted, which means we’ve assumed a reduction of 2.50% a year until your retirement date. This includes the fund growth rates shown.
  • We’ve changed the assumptions used for illustrations so these now show a pension that stays the same each year, has no spouse’s pension and includes tax-free cash. This may have affected the level of benefit you see on your statement, as the cost of providing these benefits may be different to those shown before. For example, a pension which pays you the same amount each year will cost less than one that increases each year.
  • The maximum mid growth rate that can be used in projections - other than statutory money purchase illustrations - is 5.00%.

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Retirement Cash Account/Income Account

We haven’t changed our assumptions, so these stay based on nominal growth rates that aren’t adjusted for inflation.

The nominal growth rates are reduced to:

  • Low-growth rate 2.00%
  • Mid-growth rate 5.00%
  • High-growth rate 8.00%
  • The maximum mid growth rate that can be used in projections is 5.00%.

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Combination of Phased and Retirement Cash Account plan

We haven’t changed our assumptions, so these stay based on nominal growth rates that aren’t adjusted for inflation.

The nominal growth rates are reduced to:

  • Low-growth rate 2.00%
  • Mid-growth rate 5.00%
  • High-growth rate 8.00%
  • The maximum mid growth rate that can be used in projections - other than statutory money purchase illustrations is 5.00%.

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Retirement Control Funding Accounts and Income Account

We haven’t changed our assumptions, so these stay based on nominal growth rates that aren’t adjusted for inflation.

The nominal growth rates are reduced to:

  • Low-growth rate 2.00%
  • Mid-growth rate 5.00%
  • High-growth rate 8.00%
  • The maximum mid growth rate that can be used in projections - other than statutory money purchase illustrations is 5.00%.

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  • The rate of growth used in the illustration part of your statement is calculated as an average return from the fund(s) invested in, using the proportion of each fund held. The rate is based on our view of potential long-term returns of the main asset classes (equities, property, corporate bonds, government bonds and cash) and will vary depending on the fund(s). We also call this the Economic Growth Rate. This rate is not guaranteed.

From 19 November 2016, if you're invested in a With-Profits fund:

  • We project the return on your With-Profits investments by using the Economic Growth Rate, or the appropriate With-Profits guarantee - whichever is higher.

From 22 February 2014:

  • The figures on your yearly statement - including fund growth rates - are adjusted for inflation, which means we’ve assumed a reduction of 2.50% a year until your retirement date.
  • The maximum mid growth rate that can be used in projections - other than statutory money purchase illustrations - is 5.00%.
  • The rate of growth used in the illustration part of your statement is calculated as an average return from the fund(s) invested in, using the proportion of each fund held. The rate is based on our view of potential long-term returns of the main asset classes (equities, property, corporate bonds, government bonds and cash) and will vary depending on the fund(s). We also call this the Economic Growth Rate. This rate isn't guaranteed.

From 19 November 2016, if you're invested in a With-Profits fund:

  • The figures on your yearly statement - including fund growth rates - are inflation-adjusted, which means we’ve assumed a reduction of 2.50% a year until your retirement date.
  • We’ve changed the assumptions used for projections so these now show a pension that stays the same each year, has no spouse’s pension and includes tax-free cash. This may affect the level of benefit you see on your statement, as the cost of providing these benefits may be different to those shown before. For example, a pension which pays you the same amount each year costs less than one that increases each year.
  • The maximum mid growth rate that can be used in illustrations - other than statutory money purchase illustrations - is 5.00%.

From 22 February 2014:

  • The figures on your yearly statement - including fund growth rates - are inflation-adjusted, which means we’ve assumed a reduction of 2.50% a year until your retirement date.
  • We’ve changed the assumptions used for projections so these now show a pension that stays the same each year, has no spouse’s pension and includes tax-free cash. This may affect the level of benefit you see on your statement, as the cost of providing these benefits may be different to those shown before. For example, a pension which pays you the same amount each year costs less than one that increases each year.
  • The maximum mid growth rate that can be used in illustrations - other than statutory money purchase illustrations - is 5.00%.

The nominal growth rates (these rates are not adjusted for inflation) are reduced to:

  • Low-growth rate 1.50%
  • Mid-growth rate 4.50%
  • High-growth rate 7.50%

If you’re looking for more information

How can I find out more about projection rates?

How do you work out your projection rates?