Leaving Your Employer's Pension Scheme
What happens to your pension when you leave a job? Understand your options for workplace pension pots after employment ends.
Last updated: 30 January 2025
Your pension rights continue after you leave employment.
When You Leave
What Happens
| Element | Position |
|---|---|
| Your pot | Stays invested |
| Your contributions | Stop |
| Employer contributions | Stop |
| Growth | Continues |
Automatic Changes
| Change | Detail |
|---|---|
| Status | Deferred member |
| Contributions | Cease |
| Fees | Continue from pot |
| Investment | Continues |
Your Options
Leave It Where It Is
| Position | Detail |
|---|---|
| Keep pot | In old scheme |
| Continues growing | Or fluctuating |
| Charges | Still apply |
| Access at | Pension age |
Transfer to New Employer
| Position | Detail |
|---|---|
| Move pot | To new scheme |
| Consolidate | Your savings |
| One place | Easier tracking |
| Check fees | Both schemes |
Transfer to Personal Pension
| Position | Detail |
|---|---|
| Move to | SIPP or personal |
| Your choice | Of provider |
| Control | Over investments |
| May have | Different fees |
Cash Out (Limited)
| Position | Detail |
|---|---|
| Small pots | May be able |
| Under £10,000 | Trivial commutation |
| Or if over 55 | Access options |
| Tax implications | Apply |
Deferred Member
Your Status
| You Are Now | Detail |
|---|---|
| Deferred member | Of scheme |
| No contributions | Going in |
| Rights preserved | In scheme |
| Still a member | Just not active |
Scheme Duties
| They Must | Detail |
|---|---|
| Keep your pot | Safe |
| Provide statements | Usually annually |
| Allow access | At pension age |
| Allow transfers | When requested |
Keeping Your Pension
Advantages
| Benefit | Detail |
|---|---|
| No action needed | Stays put |
| Good scheme | Keep benefits |
| Low fees | Worth staying |
| Investment options | Already chosen |
Disadvantages
| Drawback | Detail |
|---|---|
| Multiple pots | To track |
| May forget | About it |
| Fees | May be higher |
| Less control | Over investments |
Transferring Out
When to Consider
| Situation | Consider Transfer |
|---|---|
| High fees | Move to cheaper |
| Poor performance | Better options |
| Consolidation | Simplify tracking |
| Better investments | More choice |
When to Stay
| Situation | Consider Staying |
|---|---|
| Low fees | Good value |
| Special benefits | GAR, lower pension age |
| Good performance | Working well |
| Small hassle | Not worth moving |
Small Pots
The Problem
| Issue | Detail |
|---|---|
| Fees erode | Small pots |
| £500 pot | Charges significant |
| May become | Very small |
| Tracking | Multiple tiny pots |
Solutions
| Option | Detail |
|---|---|
| Transfer out | To larger pot |
| Small pot refund | If leaving early |
| Automatic consolidation | Future policy |
Statements
What You'll Receive
| Information | Detail |
|---|---|
| Annual statement | Usually |
| Current value | Of pot |
| Projection | Future value |
| Fees charged | Amount |
Keep Records
| Store | Safely |
|---|---|
| Scheme details | Provider name |
| Contact info | For scheme |
| Statements | All received |
| Pension number | Reference |
Multiple Jobs History
Common Situation
| Pattern | Detail |
|---|---|
| Several employers | Over career |
| Multiple pots | Accumulated |
| Tracking | Becomes harder |
| Consolidation | Often sensible |
Pension Tracing
| If Lost | Detail |
|---|---|
| Government service | Pension tracing |
| Find old | Pensions |
| Free | To use |
Tax Position
While Deferred
| Position | Detail |
|---|---|
| No tax | On growth |
| Tax-sheltered | Continues |
| No action | Needed |
At Retirement
| Position | Detail |
|---|---|
| Same rules | As active members |
| 25% tax-free | Lump sum |
| Rest taxable | As income |
Returning to Same Employer
If Rehired
| Position | Detail |
|---|---|
| May rejoin | Same scheme |
| New assessment | Required |
| Previous pot | Separate or combined |
| Scheme rules | Apply |
Communication
Keeping Contact
| Must | Do |
|---|---|
| Update address | If you move |
| Keep scheme informed | Contact details |
| Respond to | Communications |
| Check | Details correct |
If Lost Contact
| Issue | Solution |
|---|---|
| Scheme can't reach you | Pension tracing service |
| You can't find scheme | Pension tracing service |
| Important | To reconnect |
Employer Duties
When Employee Leaves
| Must | Do |
|---|---|
| Notify scheme | Of leaving |
| Final contribution | Processed |
| Provide information | If requested |
| No obstruction | To transfers |
Records
| Keep | Detail |
|---|---|
| Enrolment record | For leaver |
| Contribution history | As required |
| Communication | Copies |
Summary
Your Options
| Choice | Consider |
|---|---|
| Leave in scheme | If good scheme |
| Transfer out | If better option |
| Consolidate | For simplicity |
| Track | All your pots |
Key Actions
| Action | Why |
|---|---|
| Keep records | Find later |
| Compare schemes | Before transfer |
| Update details | Stay contactable |
| Monitor | Your savings |
Related answers
Choosing a Pension Provider
How do you choose a workplace pension provider? Compare options for auto-enrolment including NEST and other providers.
Pension Scheme Charges
What charges apply to workplace pensions? Understand annual management charges and how they affect pension pots.
Pension Transfers
Can you transfer workplace pensions? Understand how to consolidate pension pots and transfer between schemes.
Frequently Asked Questions
- What happens to my pension when I leave my job?
- Your pension pot stays invested and continues to grow (or shrink with markets). You stop contributing and your employer stops contributing, but the money remains yours. You can leave it where it is, transfer it to your new employer's scheme, or move it to a personal pension.
- Do I lose my employer's contributions if I leave?
- No. Once employer contributions are in your pension pot, they're yours. You don't lose them by leaving employment. The only exception is the opt-out period - if you opt out within the first month, contributions are refunded to both parties.
- Should I transfer my pension to my new employer's scheme?
- It depends on fees, investment options, and convenience. Transferring consolidates your pensions, making tracking easier. But check the new scheme's charges and options first. You can also leave it where it is if it's performing well with low fees.