Over 10 million people have been enrolled into workplace pensions since the start of auto-enrolment a decade ago. Therefore, in this 10-year anniversary, we mark the occasion by answering the most common questions we get asked about defined workplace pensions.
When you leave an employer, the only change to your defined contribution is the termination of the regular pension contributions. Most modern pension contracts typically allow you to continue making personal pensions contributions however, these will have to be arranged by yourself and be funded from your own bank account (rather than payroll).
Following this, you have three options:
While you don’t need to notify the pension provider that you have left your employer it is a good idea to do so. If you choose to keep the pension where it is, it’s recommended that you update them on any changes to your address and/or name.
There are different options available to a defined benefit pension otherwise known as ‘final salary’ pensions.
The main advantage of transferring an old workplace pension into your new workplace pension is the practicality of administration. By consolidating your pensions all in one place, it is easier to track the value of your pension pot. Additionally, if you were to change your name and/or address, you only need to remember to notify one provider.
However, there are some things to consider before you decide to transfer your pension. Each pension has different features which should be assessed before any transfer is arranged. Some pension contracts often have valuable guarantees, such as guaranteed growth rates or annuity rates, which are highly likely to be lost in a transfer. Therefore it’s important that the pension is analysed to ensure that you would not be giving up attractive features.
There are practical advantages to consolidating your pensions into one pot, but each pension must be assessed according to its own merits. As a result, it’s beneficial for individuals to seek expert advice before transferring your pension.
If you know the provider of the pension, you can try and get them to locate the pension however you may find it difficult as many providers have changed names or merged with other providers over the years. If your pension provider doesn’t have its own website, a Google search of the name could be a good starting point as it’s likely to lead to the name of the new provider.
If you don’t remember any details, then there are a couple of places that you can try, namely:
Naturally they will ask for personal information such as name, date of birth, national insurance number, previous addresses etc. These services are user friendly so it should be easy for individuals to navigate.
Most workplace pensions offer online access. You should therefore be able to get most of the information using online logins however, if you need more information, you can give the pension provider a call.
If you have engaged a financial adviser, they should write to your pension provider to get full details of your pension.
We always believe that you should speak to a pension specialist regardless of how big or small your pension is.
The Money and Pensions Service (MaPS) provides free and impartial pension, as well as debt and money, guidance to members of the public. You can find more information using the on the Money and Pensions service.
If your pension is of a reasonable size (over £150,000), then usually the benefits that a financial adviser can add would outweigh the costs.
At Lubbock Fine Wealth Management, we offer a no-obligation financial health check which is at our expense. This includes looking into your existing workplace pensions. If you would like a MOT of your finances at our cost, please get in touch with Director, Andrew Tricker, or Chartered Financial Planner, Görkem Gökyiğit.
*The value of your investment can fall as well as rise and is not guaranteed.