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    • Stevefromdonny
    • By Stevefromdonny 13th Mar 18, 11:01 AM
    • 83Posts
    • 32Thanks
    Stevefromdonny
    Moving employer at 32 - pension questions
    • #1
    • 13th Mar 18, 11:01 AM
    Moving employer at 32 - pension questions 13th Mar 18 at 11:01 AM
    I'm applying for a job with another company. I'm at the stage where its highly likely I'll get the job. I've only ever worked for one employer, I have 14 years service, and I have built up a pension of 10k (whatever that means) in 8 years. This pension is with legal and general. I was contributing 8% until my employer reviewed pensions a few years ago and cut everybody down to 5%. I had the option to increase this but circumstances meant we had other priorities with money.

    My question is, what happens to the pension I have built up if I leave that employment?
    Do i have the option to continue to contribute to that pension via my new employer, or am I forced to use my new employers pension?
    Is the old pension then frozen? Or will it continue to appreciate by RPI every year?
    Can I withdraw it and add to my new employers pension? If not, will I effectively have two pension incomes at retirement (assuming ive just had two employers)?

    I'm a little confused by pensions in general. Because I have a private pension does this mean in retirement I dont get the state pension, or do I recieve that on top of my private pension income?

    All advice welcome.
Page 1
    • dunstonh
    • By dunstonh 13th Mar 18, 11:15 AM
    • 92,594 Posts
    • 59,910 Thanks
    dunstonh
    • #2
    • 13th Mar 18, 11:15 AM
    • #2
    • 13th Mar 18, 11:15 AM
    I have 14 years service, and I have built up a pension of 10k (whatever that means) in 8 years.
    It means your contributions are being invested and have built up a value of 10k. Enough to prove around 500 a year income in retirement. A bit low for someone aged 32. One of those old ball park sayings is that you should aim for 35k by age 35. So, you are a bit behind.
    I had the option to increase this but circumstances meant we had other priorities with money.
    There will always be excuses not to pay enough into a pension. Your older self will not thank you if you keep putting it off. Plus, the less time there is to catch up, the more it will cost you to catch up.

    My question is, what happens to the pension I have built up if I leave that employment?
    It remains invested but has no more contributions added to it.

    Do i have the option to continue to contribute to that pension via my new employer, or am I forced to use my new employers pension?
    in the vast majority of cases, group schemes can only be paid in by the employer linked to the group scheme.

    Is the old pension then frozen? Or will it continue to appreciate by RPI every year?
    it is neither frozen or indexed. It is invested and will remain so until you commence retirement or you transfer it into another pension.

    Can I withdraw it and add to my new employers pension? If not, will I effectively have two pension incomes at retirement (assuming ive just had two employers)?
    You cant withdraw it but you can transfer it.

    Because I have a private pension does this mean in retirement I dont get the state pension, or do I recieve that on top of my private pension income?
    State pension is not affected by any personal provision you make. You get that regardless of what you do.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Lokolo
    • By Lokolo 13th Mar 18, 11:18 AM
    • 19,980 Posts
    • 15,109 Thanks
    Lokolo
    • #3
    • 13th Mar 18, 11:18 AM
    • #3
    • 13th Mar 18, 11:18 AM
    The start off with, at 32, 10k is a very little amount, especially after 14 years service. You should really be thinking about your contribution levels in this new job.

    It looks as though you are on a defined contribution scheme. If you are not then the rest of this is not relevant.

    - You state that you were contributing 8% but then your company cut it down to 5%. This sounds as though you were not contributing to your pension but your company was. You haven't stated how much was employer contribution and how much was employee contribution

    - Your pension will stay where it is, you can choose to move it into your new employer scheme, or you can leave it where it is. They should contact you with your options or you can look in your scheme booklet for the information

    - If you leave it where it is it will continue to grow/lose depending on what it is invested in

    - When you join your new employer they will have a pension scheme set up and you will use this for any ongoing employer/employee contributions

    - Your state pension is separate to any private pension. If you are paying NI contributions you are working towards state pension. You can look up your NI contributions on government gateway
    • xylophone
    • By xylophone 13th Mar 18, 2:00 PM
    • 25,371 Posts
    • 14,967 Thanks
    xylophone
    • #4
    • 13th Mar 18, 2:00 PM
    • #4
    • 13th Mar 18, 2:00 PM
    Your new employer's scheme might permit a transfer in - you can check.
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