Should I Transfer My Old Workplace Pension? Key Checks

If you have changed jobs and left a pension behind, you may be wondering whether you should transfer your old workplace pension into your current workplace pension or another pension. In many cases, consolidation can make your retirement savings easier to manage, but transferring is not automatically the right decision.

The important question is what your existing pension offers, what your new pension offers and whether moving the money would mean giving up valuable benefits.

What happens to my old workplace pension when I change jobs?

Your old workplace pension does not disappear when you leave your employer. If you stop contributing, it will generally remain invested with the existing provider until you decide what to do with it.

You may be able to leave it where it is, transfer it to your new workplace pension or move it into another suitable pension arrangement. GOV.UK's guidance on changing jobs confirms that your workplace pension still belongs to you after leaving an employer.

That means you do not need to rush into a transfer simply because you have started a new job.

Should I transfer my old workplace pension?

There are several reasons why transferring an old workplace pension might make sense, particularly if you have built up several pensions after changing employers.

The important point is that consolidation is not automatically better. You need to compare the pensions before moving anything.

MoneyHelper's guide to transferring or combining pensions explains that transferring may offer lower fees or different withdrawal options, but you could also lose valuable benefits attached to an existing pension.

What should I check before transferring my old workplace pension?

Before transferring an old workplace pension, check at least four things: charges, investment options, benefits and restrictions.

1. What are the pension charges?

Look at the annual management charge and any additional investment or policy charges. A small difference can become significant over a long retirement period, particularly when a pension is worth a substantial amount.

However, do not choose a pension based on charges alone. A cheaper pension is not necessarily better if it has fewer suitable investment options or important benefits are lost.

2. Where is my pension invested?

Your pension is invested, so the underlying investments matter.

Two pensions could have very different investment strategies even if they have similar charges. Check whether your existing old workplace pension gives you investment choices that are appropriate for your retirement timeframe and attitude to investment risk.

3. Does the pension have valuable benefits?

This is one of the most important checks.

Some older pensions can contain valuable guarantees or other features that you could lose by transferring. These might include guaranteed annuity rates or other safeguarded benefits.

If your old workplace pension is a defined benefit pension, sometimes called a final salary or career average pension, the decision is much more significant. You could be giving up a guaranteed retirement income.

The FCA's guidance on defined benefit pension transfers explains why transferring out of a DB pension is a major decision and highlights the guarantees that could be lost.

4. Can you access the pension when you need it?

Check the pension's retirement age and the options available when you eventually take your money.

Most modern defined contribution pensions can normally be accessed from age 55, rising to 57 from April 2028, subject to the rules and any protected pension age that may apply.

The important thing is to understand what you are transferring before making a decision.

Is it better to combine my old workplace pension with my new one?

For some people, yes.

If you have worked for several employers, you may have accumulated three, four or even more pension pots. Managing them separately can make it harder to see how much you have saved and whether your overall investments remain suitable.

Consolidating an old workplace pension with another pension can make your retirement savings easier to monitor and may give you access to a wider range of investment and retirement options.

But you do not have to combine everything. One pension might be suitable to transfer while another is better left where it is.

Will transferring my old workplace pension save me money?

It might, but you need to compare the full cost of both arrangements.

For example, suppose your old pension charges 0.8% a year and your new arrangement costs 0.4%. On a £100,000 pension, that difference is £400 a year before considering investment performance and compounding.

That does not automatically mean transferring is right. The existing pension may have valuable benefits that outweigh the potential saving.

The right comparison is therefore the overall value of each pension, not simply the headline charge.

What if I have several old workplace pensions?

If you have several old workplace pensions, it can be worth carrying out a full pension review rather than making individual transfer decisions.

A review can establish what pensions you have, how much they are worth, what you are paying and what benefits each arrangement provides. You can then decide whether consolidation would improve your overall retirement planning.

This can be particularly useful if you have changed jobs several times during your career and have accumulated pensions with different providers.

Old workplace pension advice in Chesterfield

If you live or work locally, old workplace pension advice in Chesterfield can help you understand your options before making a transfer decision.

At Castle Stonebridge Financial Planning, our independent advisers can review your existing pensions and consider them alongside your current workplace pension, retirement objectives and wider financial position.

The aim is not simply to move an old pension. It is to establish whether keeping it, transferring it or consolidating it is likely to be more appropriate for your circumstances.

Frequently asked questions

Should I transfer my old workplace pension to my new employer?

You can often transfer an old pension into a new workplace pension, but you should compare charges, investment options and benefits first. You should not assume the new pension is automatically better.

Is it worth consolidating old workplace pensions?

Consolidation can make pensions easier to manage and may provide access to different investments or lower charges. However, valuable benefits can sometimes be lost, so each pension should be checked before transferring.

Can I transfer an old workplace pension without an adviser?

Some defined contribution pension transfers can be completed without regulated financial advice. However, transferring a defined benefit pension or another pension containing safeguarded benefits can involve much more significant considerations and, in certain circumstances, regulated advice is required.

What happens if I leave my old workplace pension where it is?

Usually, the pension remains invested with the existing provider and you retain the benefits you have built up. You can normally decide what to do with it later, subject to the scheme's rules.

Should you transfer your old workplace pension?

There is no universal answer. For some people, transferring an old workplace pension can reduce complexity, improve investment choice or lower costs. For others, keeping it exactly where it is may be the better option.

The key is to compare what you have before giving anything up.

If you have recently changed jobs or have several pensions from previous employers, speak to Castle Stonebridge Financial Planning about reviewing your arrangements and working out whether consolidation could make sense for you.

Disclaimer* The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.