Pensions From Previous Employers
When people change jobs throughout their career, it is common for their workplace pension to remain with the provider used by their previous employer.
Unlike salary or employment benefits, pension savings do not automatically move when you start a new job. Instead, each employer typically provides their own workplace pension scheme.
Over time this means many people build up several pension pots held with different providers.
Understanding how pensions from previous employers work can help you keep track of your retirement savings and decide whether to leave pensions where they are, transfer them to another scheme, or review your retirement planning more broadly.
In this article
Quick Summary
This may help you:
- Understand what happens to workplace pensions after leaving a job
- Know your options for managing pensions from previous employers
- Keep track of pension pots built up across your career
- Understand when pension consolidation is sometimes considered
Before deciding, check:
- Pension charges and fees
- Investment strategies within each pension
- Whether the pension contains valuable guarantees
- How multiple pensions fit into their long-term retirement planning
Part of the Workplace Pensions series
- What Happens To Your Pension When You Change Jobs?
- Pensions From Previous Employers
- Workplace Pensions Explained: How Auto-Enrolment Works
- SIPP vs Personal Pension Explained
- Defined Benefit vs Defined Contribution Pensions Explained
- Defined Benefit Pension Transfers Explained
What Happens To Pensions When You Leave A Job
When you leave an employer, contributions into that workplace pension usually stop. However, the pension itself remains in place.
The pension normally stays invested with the provider used by your former employer.
Your pension savings typically:
- Remain invested in the existing funds
- Continue to rise or fall depending on market performance
- Stay accessible through the provider's online account
Although the pension remains with the provider, the money still belongs to you.
Because each employer typically provides its own pension scheme, it is common for people to accumulate several pensions throughout their career.
Our article on what happens to your pension when you change jobs explains this process in more detail.
Why Many People End Up With Multiple Pensions
Because employers usually offer their own pension schemes, changing jobs often results in a new pension pot being created.
For example, someone who has worked for five employers may have five separate pension pots held with different providers.
This situation is extremely common and is explored further in our article on multiple pension pots explained.
While having several pensions is normal, it can make retirement planning more difficult.
Multiple pensions can make it harder to:
- Track total retirement savings
- Monitor investment performance across providers
- Understand charges across different schemes
For this reason, many people periodically review their pensions to maintain a clearer picture of their retirement savings.
Your Options For Managing Pensions From Previous Employers
When you have pensions from previous employers, there are usually several options available.
Leave the pension where it is — One option is simply to leave the pension with the existing provider. This is often the default option and may be suitable if the pension has competitive charges and suitable investment options.
Transfer the pension — In some situations people choose to transfer an old pension into another pension scheme such as a personal pension or a new workplace pension.
Combine pensions — Over time, having several pension pots across different providers can make retirement planning more complex. Some people therefore choose to combine pensions so they can be viewed and managed in one place.
However, consolidation is not suitable for everyone. Some pensions contain valuable guarantees that could be lost if transferred.
When People Consider Combining Pensions
Some people decide to consolidate pension pots when they realise they have built up several separate plans across their career.
Our article on should you combine your pensions explains the advantages and risks of consolidation in more detail.
When Financial Guidance May Help
Pension decisions can become more complex when multiple pensions are involved.
Some people consider seeking financial guidance when:
- They have pensions with several providers
- They want to review pension charges
- They are unsure about transferring pensions
- They want to review their investment strategy
A regulated financial adviser can review the details of pensions and explain how different options may affect long-term retirement planning.
Key Considerations
| Factor | Why It Matters |
|---|---|
| Multiple pensions | Having several pensions can make retirement planning harder to track |
| Charges | Different providers may charge different fees |
| Guarantees | Some pensions contain benefits that could be lost if transferred |
| Investment strategy | Different pensions may follow different investment approaches |
Frequently Asked Questions
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Exploring Your Options
Financial planning decisions depend on individual circumstances. If you would like clarity on how the topics discussed may apply to your situation, TrustEvo can connect you with a regulated financial adviser.
This article is provided for general information only and does not constitute financial advice. Financial decisions depend on individual circumstances and regulated financial advice may be appropriate in some situations.