I'm a member of the UK's Civil Service pension scheme nuvos which is a defined benefit scheme and I use double-entry bookkeeping software (Gnucash).

Every month this happens on my payslip:

                                  Account          Charge      Income
  Gross salary                    Income                       1000
  Net salary                      Bank account     600
  Pension contribution            ???              200
  Tax                             Expense > Tax    200

Employer pension contribution     ???                          100

So at the end of 1 year of employment I have (200 * 12) + (100 * 12) = 3600 that I don't know where to store. Is it an expense, or an asset, or something else?

And then at the end of my first year in the scheme I received this statement:

Your pension is now worth £500. This is calculated as 2% of your pensionable gross income.

There's no straightforward way that I can work out to match up the value of these two things in a double-entry accounting system.

In defined contribution schemes that I'm a member of, this is much more straightforward because deductions from my payslip purchase "shares" which vary in value over time.

  • Your in a career average DB scheme you don't have assets in the same way as you do with a DC and why on earth are you going to such extreme lengths double entry book keeping for you personal income
    – Pepone
    Feb 14, 2015 at 16:48
  • Because I enjoy learning new things by trying them out and seeing how they work.
    – alexmuller
    Feb 14, 2015 at 17:19
  • Doesn't make sense for you for DB pensions the trustees and the fund mangers look after that - its not like you can track performance of individual securities as you can with a sip
    – Pepone
    Feb 14, 2015 at 19:31

1 Answer 1


The easiest thing to do, especially considering this is a household budget, is to expense the pension contributions and leave the pension off the books all together.

The main reason for this is that the statement is telling you how much you are eligible to get per year, so the £500 is not directly comparable to what you pay in. You know how much you are going to get-- GnuCash isn't really built to manage future expected income, so it's better to just leave it off the books until you retire, at which point you can record the pension as a source of income. (Assuming you're still keeping track of your household budget this way by then)

If you considered the pension an asset, and you wanted to keep track of the value completely accurately (to compare it against what you paid in) you'd have to keep track of the inflation-adjusted value of £500 per year, every year that you retire until the estimated year that you die, which is, quite frankly, out of the scope of a household budget or of anyone without professional actuarial training.

If you really must keep track of the value of your pension, record the pension contributions as an asset, and then just assume that that is the value of your pension... with a note that that value translates to a future annual payment of whatever your statement tells you. Note that this will eventually have problems: They probably assume you will draw your pension for somewhere between 12-20 years, so the £3600 you put in will give you £6000-£10000 in benefits-- since of course your £3600 is going to gain in value over time. You can't easily adjust for that either, which is why it's better to not even try.


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