If you leave an employer, the pension you have accrued whilst employed remains yours, so even if you leave your pension in situ, you will still receive that as a pension when you reach the retirement age as stipulated in scheme’s rules.
You can continue to pay into it yourself, or you can transfer the pension from your old employer to your new one. Usually a pension transfer between employers is allowed as long as it’s done up to 12 months before you’re due to retire, however, every scheme has different rules, so you’ll need to clarify if it possible by looking through the terms and conditions.
If you want to move from a defined benefit pension or from any pension that is worth over £30,000, by law you must receive independent financial advice before you can make a decision to transfer.
How do I transfer my pension from a previous employer?
You will need to check what type of pension you have with your old or existing employer, so you can find out its value as well as the process you’ll need to follow to enable a transfer.
If you have a defined benefit pension like a final salary pension, a Cash Equivalent Transfer Value (CETV) will need to established. This is an estimate of the value of your pension, and this figure is the amount that will be transferred if you choose to proceed with a transfer.
There will be a written application to request the transfer. You may also have to pay a transfer fee, depending on how long you’ve had the pension and its value.
Reviewing your pension status
When leaving a job it is a good time to review your current pension situation to find out how much you already have invested and whether there are specific targets you would like to meet, as well as to review any benefits you have and any changes that may have taken place since your pension started. Much of this information will be in your pension statement.
Fees and deadlines
In some schemes, you will have to pay a fine if you make an early exit. Also when you move to a new job there may be a transfer period, which means you can transfer within a specified time limit, but if you miss it, a transfer may not be possible.
It is important to know what your current benefits are and which of them you can transfer over. You may discover there is a benefit such as a guaranteed annuity rate that isn’t worth missing out on. In which case, it may be wise to leave it invested where it is.
Can I transfer my UK personal pension to an employer pension?
It is possible to transfer your UK personal pension transfer to an employer pension however the same risks as above should be taken into consideration before you make a decision.