Transferring your pension when you move job

Leave the Pension With Your Employer

As you must tell from the discussion up to this point, this is our least favourite option. It, nonetheless, has some benefits. The one that readily comes to mind is that you will most likely have to pay fewer charges if you leave your pension managed by your former employer. Group managed pension schemes notoriously charge lower than individual schemes.

However, on the flip side, the disadvantages are substantial. Some of the drawbacks to leaving your pension contributions with a previous employer include the following:

● Your old firm could pack up shop. This could complicate your pension recovery process when you retire.
● Trustees are not obligated to keep in touch with you. This is especially true as you become a deferred member. Hence, if you move, your pension benefits could disappear.
● The scheme rules will dictate pension benefits. This might not be in your best interest.

Transfer into a Personal Retirement Bond

A personal retirement bond, also known as a Buy Out bond, allows you to move your pension to a scheme you will manage yourself. People who take out a personal retirement bond are those leaving their jobs or their company’s pension schemes.

There are many advantages if you choose this option. These include:

● Your pension’s full cash value will be in one account. There will be no changes to your accumulated benefits when you transfer to your new account. If you want to explore a lump-only service option that is still possible. Essentially, your pension transfer value will not be tampered with.
● You will completely control your pension scheme, benefits, and investment decisions. A group-run pension scheme may not factor individual considerations when making a call.
● You can design your investment pathway by yourself, considering your risk appetite. With a group-run pension scheme, there is always the risk of conflict with the group’s investment plans and objectives. However, you have no such problems with a personal retirement bond. You can invest any way you want to and bear any risks or rewards that may arise from there.
● You can access your pension benefit when you get to 50. Thus, there is no difference in this regard from if you are using a regular scheme.

Combine Pension Pots

Sometimes, you may have two or more pension arrangements simultaneously. For instance, you may have had multiple previous employers who used different schemes. In this case, it would not be as simple as either leaving your pension fund with your previous employer or taking out a personal retirement fund.

Combining your pension pots also has its advantages. For instance, you get to pay reduced fees in charges and taxes. In addition, it makes it easy to administer the pension scheme since you will have just one provider. You can access your benefits once you get to 50 and above.

Takeaways

Your pension is your legal right. It can be what ensures that you have a blissful experience upon retirement. This makes it important to pay attention to your accumulated pension fund if you leave a place of employment.

We have given you several options to choose if you need to secure your pension. However, we recommend you transfer your pension fund to a personal retirement fund for the reasons discussed above. You may be unclear about certain things. Secure Your Future can clear up any confusion for you. So do reach out, and let’s begin the conversation!