Tips to Manage Your Pension During a Job Change
Changing jobs? Learn how to manage your pension during a job change with expert tips on consolidation, tracking lost pensions, and planning for retirement. However, they also come with their fair share of admin. One area that often gets overlooked is your pension. In the UK, most employees are automatically enrolled into a workplace pension scheme. As you move through your career, it’s common to accumulate several pensions from different jobs, which can make it harder to keep track of your retirement savings.
So, what happens to your pension when you change jobs? And how can you manage your savings effectively during a transition? Here are some key tips to help you stay on top of your pensions and why getting advice can make all the difference.
1. Understand What Happens to Your Existing Pension
When you leave your job, your workplace pension doesn’t vanish. The money you and your employer contributed remains invested, and the value of that pot will continue to go up or down depending on investment performance and charges. However, you will no longer contribute to that particular scheme once you’ve left the employer. The scheme becomes a deferred pension, meaning it stays in place until you choose to transfer it, consolidate it, or eventually access it in retirement.
Top tip: Keep your pension paperwork and log-in details somewhere secure so you can monitor your pension values over time and avoid losing track.
2. Get to Know Your New Workplace Pension
Your new employer will usually auto-enrol you into their workplace pension scheme, which is often set up within a few weeks of your start date. Under auto-enrolment rules, you’ll typically pay in a minimum of 5% of your qualifying earnings, and your employer will contribute at least 3%. However, schemes differ. Some employers offer higher contributions, salary sacrifice arrangements, or a wider range of investment options. It’s worth understanding what the new scheme offers and how it fits into your broader retirement plan.
Top tip: Ask your new HR or payroll team for details about the scheme and review the default investment fund it might not suit your personal risk profile or long-term goals.
3. Consider Consolidating Old Pension Pots
If you’ve changed jobs several times, you may have multiple pension pots with different providers. While this isn’t inherently a problem, it can become harder to manage, and you may be paying higher charges than necessary. Consolidating pensions into one plan can simplify things, make it easier to monitor your progress, and potentially reduce fees. But consolidation isn’t right for everyone.
Before transferring any pension, always check:
- Whether there are any exit penalties or transfer charges
- If you’d lose any valuable benefits (e.g. guaranteed annuity rates or protected tax-free cash)
- Whether the receiving pension offers better investment choices or lower fees
Top tip: Speak to a financial adviser before consolidating pensions — particularly if you have defined benefit pensions or older schemes with unique features.
4. Track Down Lost or Forgotten Pensions
It’s surprisingly easy to lose track of pensions, especially if you’ve moved house or don’t recall who the provider was. Fortunately, the Government’s Pension Tracing Service can help you locate lost or forgotten pension pots using the name of your old employer or provider. Once found, you can request up-to-date information about the value and investment performance and decide what to do next.
Top tip: Each time you change jobs or move house, notify your pension providers to keep your contact details current and avoid losing touch with your money.
5. Review Your Retirement Goals
A new job is a perfect opportunity to review your wider financial goals. Your salary may have changed, your circumstances might be different, or your vision for retirement could have evolved.
Ask yourself:
- Are you on track to retire when you want to?
- Are you saving enough now, considering your new role or salary?
- Does your investment strategy still reflect your time horizon and attitude to risk?
Using a pension calculator can help you estimate your projected retirement income, but for more tailored insight, it’s worth getting financial advice. An adviser can help you model different scenarios and make adjustments to stay on track.
Top tip: Even small increases in contributions or better fund choices can have a big impact over time. Don’t wait take action now!
Final Thoughts: Why Financial Advice Matters
Pensions may not feel urgent when you’re settling into a new job, but managing them properly during a career transition can lead to far better outcomes in the long term. From understanding new schemes and tracking down old pots to deciding whether to consolidate and ensuring your savings align with your goals, there’s a lot to consider. Much of it can have significant financial implications.
That’s where professional advice can add real value. As Independent Financial Advisers (IFAs), we help you:
- Understand and compare pension schemes
- Make informed decisions about consolidation
- Optimise your investment strategy
- Plan effectively for the retirement you want
Need help navigating your pensions?
We’re here to help. Whether you’ve just changed jobs or are planning ahead, we can offer clear, independent advice tailored to your circumstances. Get in touch today to book a no-obligation pension review and take control of your financial future.
