Author Topic: Leaving job. What do I do with my workplace pension?  (Read 604 times)

LFH86

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Leaving job. What do I do with my workplace pension?
« on: April 29, 2018, 03:00:10 PM »
This is potentially a stupid question. Iím going to ask it anyway. I googled and it confused me.

Iím changing jobs in a couple of weeks. I have a workplace pension at my current job which is through Legal and General which I contribute 5% to each month with a 3 or 5% match (canít remember which). I have about £6k in there.

My new job will also have a workplace pension, don't know the provider.

Do I need to do anything with my current pension when I leave? Or if I leave it will it just continue to sit there until Iím old enough to use it?

cerat0n1a

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Re: Leaving job. What do I do with my workplace pension?
« Reply #1 on: April 30, 2018, 12:35:58 AM »
Do I need to do anything with my current pension when I leave? Or if I leave it will it just continue to sit there until Iím old enough to use it?

If you leave it, it will just sit there and continue to grow (hopefully) until you're old enough to use it. So you don't *need* to do anything. If you move jobs reasonably often, it can be easy to end up with lots of small pension pots like this and be paying fees on all of them, those fees will reduce the performance of the investment, so it can make sense to consolidate all of them in one place.

So, you can also transfer the money that's in it into another pension. The standard advice round here would be to move it into a self-invested personal pension (SIPP) and invest it yourself, into something like Vanguard Lifestrategy (VLS80 etc.) or Vanguard World Index (VWRL).

Obviously, you will want to join the workplace pension in your new job too.

londonstache

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Re: Leaving job. What do I do with my workplace pension?
« Reply #2 on: April 30, 2018, 04:07:06 AM »
Exactly this. Check the fees on the old one and the new one. I've moved one old one across to Hargreaves - didn't like the fees, wanted to be in Vanguard Lifestrategy 80%. However another old pension is doing perfectly well, so I've left it alone for now.

PhilB

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Re: Leaving job. What do I do with my workplace pension?
« Reply #3 on: April 30, 2018, 04:36:14 AM »
If you do decide to leave it there, don't forget to notify them whenever you change address.  If you move a lot then the cost of stamps may be enough to sway you to transfer!

FIFTWUK

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Re: Leaving job. What do I do with my workplace pension?
« Reply #4 on: April 30, 2018, 08:36:24 AM »
You should also check that you are forced out - e.g. my own company pension has this requirement. Perhaps it's because it's a salary sacrifice scheme, not sure, but there you go.

I had asked for a bit of clarity from HMRC and to avoid any tax implications, they've advised me the transfer has to be between two schemes (e.g. company pension and a SIPP), this is their guidance on it: https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm100000.