Your Pension and Changing Jobs

Working today often means changing jobs many times. A very lucky few are able to move jobs, perhaps within the public sector, where their pension simply continues where it left off in the same superannuation scheme. For most of us, changing jobs means facing a decision about our pension and because so many people think retirement is such a long way off, such decisions are often given little regard, although in reality, each decision will directly affect your future income.

There are a great many different types of pension scheme run by employers and because of this, and the fact that everyone’s needs are different, there is no easy answer to the right choice when it comes to what to do with those benefits.

Typical choices are:-

Leave the money where it is. If it is a company scheme (rather than a lot of personal pension plans administrated by the employer), designated trustees will look after that money for you until you retire. Money in pension funds must be kept separate from the company’s own finances in case the company fails. Some schemes will keep an amount of pension for you to take when you retire (subject to the scheme having enough assets to meet its promises), with others keeping your pension fund for you to buy whatever it can depending on how much it has grown by.

Move the Pension into a new company scheme. It may be possible to move your pension fund from one employer to another depending on the types of scheme involved. While this may make things simpler for you in reducing the number of pensions you have, you may find other restrictions apply, such as where your money is invested.

Move the money into a plan in your own name. You take control over all the decisions. This may give you much more flexibility and opportunity, but with it comes ultimate responsibility for your future income, and you could lose any advantages of company scheme benefits, and these can be very substantial.

This is an extremely complex area and it is vital to get the right advice. We have a fully qualified and authorised specialist “in house” who is able to produce a full analysis for you to establish which route is most appropriate for your individual circumstances.

A pension is a long term investment. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.

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