What happens to my pension?
Switching jobs can be exciting. New role, new responsibilities, new salary (hopefully). But it often raises a question most people push to the bottom of their to-do list: what happens to my pension?
Whether you’ve moved once or ten times, it’s easy to lose track of where your money is and what it’s doing. Let’s clear that up.
Your Pension Doesn’t Disappear
When you leave a job, your workplace pension doesn’t vanish. The money you and your employer paid in stays in the pension pot, and it continues to be invested. Depending on the scheme and where it’s held, it may continue to grow until you access it, usually from age 55, or 57 from 2028 under current legislation.
If you don’t do anything, the pension stays exactly where it is. That might work fine. But over time, you might end up with five or six different pension pots scattered across different providers. That’s where problems start.
The Problem with Forgotten Pensions
It’s estimated that around £31 billion is sitting in forgotten UK pension pots, according to research by the Pensions Policy Institute. It’s not that the money is lost, it’s just not being actively managed. And if no one’s keeping an eye on it, you might be exposed to unnecessary charges, poor performance, or an investment strategy that no longer suits your situation.
Tracking down old pensions can be a bit of admin, but it’s worth doing. The government’s Pension Tracing Service is a free and useful tool to start with: gov.uk/find-pension-contact-details
Should You Consolidate?
When people have multiple pension pots, they often ask if they should combine them. It can make things simpler, one provider, one investment strategy, one statement to read each year. But it’s not always the best move.
Some pensions come with valuable benefits, like guaranteed annuity rates or lower fees that might not be available elsewhere. Others might apply exit penalties if you move the funds. That’s why we always recommend getting advice before consolidating. We review the details of each scheme and explain the pros and cons in plain terms so you can make a well-informed choice.
Starting a New Workplace Pension
When you join a new employer, you’ll usually be automatically enrolled into a new workplace pension scheme. You’ll make contributions, and your employer will too. The minimum combined contribution is 8% of qualifying earnings (5% from you and 3% from them), but many schemes offer more generous terms.
You don’t need to do anything to start this, but it’s worth checking that the scheme’s default investment fund suits your goals and risk tolerance. Default funds are often cautious by nature, but that might not be right for you, especially if you’ve got 20 or 30 years until retirement.
What We Do
At Appletree Financial Services, we help clients stay on top of their pensions at every stage, changing jobs, nearing retirement, or just trying to get a clearer picture.
We don’t believe in a one-size-fits-all approach. Every pension review starts with a conversation about what matters to you.
Changing jobs is a great time to take stock. Your pension might not feel urgent, but it’s one of the most important assets you’ll ever have. A little attention now can make a big difference later.
If you’d like a clear, professional review of your pensions, please get in touch, we’re here to help.
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
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