What happens to my pension if I move jobs?

Moving jobs is a common part of modern career paths, but what does this mean for your pension? Let's break it down to help you understand how your pension is affected when you switch employers.

Your pension is still yours

The good news is your pension stays with you, even when you leave a job. Whether it's a defined contribution plan or a defined benefit plan, the funds you've accumulated remain yours. The type of plan determines how the pension will be managed moving forward.

Defined contribution pensions

For defined contribution pensions, your money stays invested. You'll keep receiving yearly statements showing the fund's performance. However, remember that investment values can fluctuate.

Defined benefit pensions

If you have a defined benefit plan, your pension will continue to be adjusted regularly to match inflation, ensuring its value is preserved over time.

Stopping contributions

When you change jobs, both your employer’s contributions and your automatic paycheck deductions to your old workplace pension will cease. You will need to start a new pension plan with your new employer or set up a private pension if you become self-employed.

Managing multiple pensions

Managing multiple pension pots from different jobs can become cumbersome. You can choose to combine them into one account, which could make managing your retirement savings more straightforward. Be sure to compare the features and benefits of each before making any transfers.

Keep in touch with your pension provider

It's essential to keep your pension provider updated with any personal changes, such as your address or name. Maintaining communication will ensure you continue to receive important updates and statements.

Setting up a new pension

Upon joining a new employer, you'll generally be auto-enrolled into their pension scheme. Additionally, you can set up a personal pension to further boost your retirement savings.

Self-employed options

If you decide to go self-employed, you’ll need to take charge of your pension arrangements. This gives you the flexibility to choose a plan that best fits your financial goals and retirement plans.

Using a pension app

Platforms like Penny make it easier to manage your pensions. With Penny’s mobile app, transferring and managing old workplace pensions when switching jobs becomes simpler and more efficient.

Switching jobs doesn't mean losing your pension. With correct management and understanding, you can ensure your retirement savings continue to grow, no matter where your career takes you.