When Leaving A Job, How To Stay Updated On Your Retirement Savings
Changing jobs often signals the start of an exciting new chapter, bringing fresh opportunities, new challenges and often a higher salary. However, amidst all this change, it’s easy to overlook certain details, such as your old pension, especially since new employers usually auto-enrol you into a new pension scheme.
With over 3.3 million pension pots, each averaging £9,470, believed to be ‘lost’ in the UK, and nearly a quarter of UK workers (23%) planning to leave their job in 2025, it is crucial to stay informed on your retirement savings and understand the steps to take after changing employment.
What Happens To Your Pension When You Leave A Job?
When you leave a job, your investment doesn’t stop. However, both your contributions and those from your employer cease. While your savings remain invested through investment, ongoing charges may apply and, over time, may gradually decrease its value.
It’s important to notify your pension provider of any changes to your personal details, such as your address, particularly if your work email has been deactivated. Updating your contact information helps you stay informed about your savings and prevents losing contact with your pot.
Tracking Down Old Pensions
If you’ve had several jobs, it can be tricky to keep track of your different pension pots. You may not immediately know where all of your savings are held, but tools are available to assist you. A pension tracing service can help locate any lost pension pots using details from previous employers.
Should You Consolidate Your Pensions?
Before consolidating pensions, assess both the advantages and possible drawbacks. On the positive side, merging pensions could lower fees, make retirement savings simpler, and provide clearer oversight of progress towards retirement goals.
However, the decision depends on individual circumstances, and important benefits might be lost during the transfer process. Higher growth rates or rarely offered terms, like guaranteed annuity rates, may remain in older schemes. Therefore, consider professional guidance before deciding if this is the right decision for you.
What To Do If You’re In Between Pensions
If you’re taking a career break, changing jobs or working in a role that doesn’t offer an immediate workplace pension, don’t fall into the trap of neglecting your retirement savings. You may be able to contribute to existing pension schemes, depending on your provider.
For those without such an option, considering a personal pension plan could be a practical solution. By remaining consistent with contributions, even during transitional periods, you will ensure your retirement savings stay on course.
Is It Time You Built A Clearer Financial Roadmap For Your Retirement?
It is essential to keep track of your pensions to optimise savings for a comfortable retirement. Need guidance? Contact us to explore your options and create a clearer financial plan.
Source data:
http://www.abi.org.uk/news/Articles/Brits-unclaimed-pension-pots
http://www.pru.co.uk/retirement/pension-options/pension-advice-2025-uk-culture-amp/
This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax treatment may depend on individual circumstances and may be subject to change in the future. For tailored advice, speak to a professional adviser.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investment (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available.