How do you check each year whether you are on course to retire?

01 The four numbers

Add up everything invested across every account — pensions, ISAs, general investment accounts. That is the pot, and it should be one figure rather than a set of provider statements.

Then the guaranteed income: your State Pension forecast at State Pension age, plus any defined benefit pension at its normal pension age, plus a partner's equivalents. That number changes more often than people expect, because forecasts update and deferred pensions revalue.

Then the gap between your expected spending and that guaranteed income, which is what the pot has to fund. And then the years until you plan to stop, which falls by one every year whether or not you do anything.

Two of those numbers are harder to produce than they look. The pot requires adding up accounts across several providers, which nobody does automatically, and the guaranteed income requires reading a State Pension forecast and a deferred benefit statement rather than remembering roughly what they said. Both are an hour once and ten minutes thereafter.

On the defaults above, the worked example shows £154,725. Projected pot £497,582 against £342,857 needed at a 3.5% withdrawal rate.

Source: Plan your retirement income

02 What to compare them against

Compare each against last year's, not against a target. The useful question is whether the gap between where you are and where you need to be has widened or narrowed, and a single year's figures cannot answer it.

The pot moving with markets is noise. The guaranteed income moving is signal, because it reflects a qualifying year added, a deferred pension revalued or a forecast corrected — and it changes the required pot by roughly twenty-eight times the annual amount.

The gap moving is the most important signal of all, because it usually means spending has changed. That is the number a review should be most alert to and the one most reviews do not track.

Put a percentage next to the comparison rather than only a difference. A pot that grew 6% in a year when the household contributed 4% of it has grown by 2% from markets, and separating those two makes the review far more informative than a single balance ever is.

Source: Check your State Pension forecast

03 When to act

Act when the gap has moved materially, not when the pot has. A portfolio that fell 20% in a year has done something ordinary; a household whose spending has risen by £4,000 a year has changed the plan.

The available responses are the same four as always: contribute more, work longer, spend less, or take more risk. Reviewing annually means catching a drift early enough that the first two are still available, which is the whole point of doing it.

It is also the moment for the annual allowances — ISA subscription, pension contribution, Capital Gains Tax exemption — because all of them expire and none carries forward.

Source: Individual Savings Accounts (ISAs)

04 The things worth checking once a year

The State Pension forecast, because a qualifying year may not have registered. The National Insurance record for both partners, because gaps are cheap to fill inside the window and impossible outside it.

The expression of wish on every pension, which takes minutes and is frequently years out of date. And the total charges being paid, which is the only input you control directly.

Nothing else needs annual attention. Fund selection, asset allocation and provider choice all change slowly, and reviewing them yearly generates activity rather than improvement.

One more thing belongs on the annual list because it changes silently: whether either partner's employment has moved them into or out of a workplace pension, and at what contribution rate. A change of job frequently resets a contribution to the statutory minimum, and nobody is told.

Source: Workplace pensions

05 Keeping it to an hour

Write the four numbers in the same place every year, so the comparison is trivial. A single sheet with a row per year does more than any planning tool, because it shows direction rather than a snapshot.

Do it at the same point in the year, ideally in January, so the allowances can still be used before 5 April. A review in May has lost that year's opportunity.

And resist adding detail. The temptation is to model more precisely; the value is in doing it consistently, and a review that takes a weekend is a review that gets skipped.

Source: MoneyHelper: pensions and retirement