What Happens To Your Pension When You Change Jobs?
When you leave a job, your workplace pension normally stays where it is with the existing pension provider. The money remains invested in your name and continues to grow (or fall) depending on investment performance.
Many people assume their pension automatically moves with them to their next employer, but this is rarely the case. Each employer typically provides a new workplace pension scheme, which means over time it is common to build up several separate pension pots.
Understanding what happens to your pension when you change jobs can help you decide whether to leave the pension where it is, transfer it to another scheme, or review your overall retirement planning.
In this article
Quick Summary
This may help you:
- Understand what happens to workplace pensions after leaving a job
- Know your options for managing old pension pots
- Keep track of multiple pensions from previous employers
- Understand when consolidation may be considered
Before deciding, check:
- Pension charges and fees
- Investment strategies within each pension
- Whether the pension contains valuable guarantees
- How multiple pensions fit into your overall 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 Your Pension When You Leave a Job?
When you leave an employer, contributions into that workplace pension normally stop. However, the pension itself does not disappear.
Instead, it usually remains invested with the pension 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 normally provides its own pension scheme, it is common for people to accumulate several pension pots throughout their career.
For this reason, many people periodically review their pensions to ensure they still align with their retirement goals. Our article on how often you should review your pension explains why reviewing pensions occasionally can help keep retirement planning on track.
Your Options When You Change Jobs
When leaving a job, there are usually several options available for your existing pension.
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 decide to transfer an old pension into another pension scheme — such as a personal pension, a new workplace pension, or another existing pension plan. Transfers can simplify retirement planning in some circumstances, although it is important to review any guarantees or charges before moving pensions.
Combine pensions — Over time, having several pension pots across different providers can make retirement planning more complex. Some people therefore choose to combine their pensions into a single account so they can be viewed and managed in one place.
Consolidation is not always appropriate. Some pensions contain valuable guarantees that could be lost if transferred. Our article on should you combine your pensions explains the potential advantages and risks in more detail.
Why Many People End Up With Multiple Pensions
Because each employer usually provides its own workplace pension scheme, it is common for people to build up several pensions during their career.
For example, someone who has worked for five employers may have five separate pension pots held with five different providers.
While this is completely normal, having several pensions can make retirement planning harder to manage.
Multiple pensions can make it more difficult to:
- Track total retirement savings
- Monitor investment performance
- Understand charges across providers
For this reason, people often review their pensions when changing jobs to maintain a clearer picture of their retirement savings.
When People Consider Combining Pensions
Some people choose to consolidate pension pots when they realise they have accumulated several separate plans over the years.
Common reasons people consider combining pensions include:
- Wanting to view all retirement savings in one place
- Finding it difficult to monitor multiple providers
- Wanting to compare charges across pensions
- Preparing for retirement and wanting a clearer picture of total savings
However, combining pensions is not suitable for everyone. Before transferring any pension, it is important to check for valuable guarantees, exit fees and whether the investment options in the new scheme are appropriate. MoneyHelper — the UK's government-backed financial guidance service — provides free, impartial guidance on pension transfers and consolidation.
When Professional Guidance May Help
Pension decisions can become more complex when multiple pension pots are involved or when retirement approaches.
Some people consider seeking financial guidance when:
- They have pensions with several different providers
- They are unsure about charges within older pensions
- They want to review their investment strategy
- They are considering transferring or combining pensions
- They want to understand how different pensions work together
A regulated financial adviser can review the details of your pensions and help explain how different options may affect your 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 include valuable benefits that could be lost if transferred |
| Investment strategy | Different pensions may follow different investment approaches |
Frequently Asked Questions
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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.