Your options when you leave your employer

What happens to my company pension now I’ve left my job?

As you’ve left your job, the payments you and your employer were making into this pension have stopped.

Your pension plan has always belonged to you, and you can decide what you want to do with it.

It’s important to make sure you’ll have enough to live on when you retire. Choosing to pay money into your pension now could help increase the amount you have for your retirement.

What are my options?

In the sections below, we’ve outlined your options to help you decide what to do next.

Each section gives you information about what you can do and how to do it. If you want any more information, you can call us on 0800 145 5744. We can’t give you financial advice, but we can talk you through your options.

Please note, whenever we refer to tax, that tax treatment depends on your individual circumstances and may be subject to change in future.

Option 1 : Paying into your pension

Paying into your pension will help build up your pot, potentially giving you more money when you retire. The more you can invest into your pension, the better.

It’s up to you how much and how often you pay into your pension

You can pay into your pension from as little as £16 a month. Every little bit you put in can make a difference to the size of your pension pot when you retire. The more you can invest; the better off you could be when you want to retire. Use our pension calculator to see how paying more in affects your final pension plan value when you retire.

You can change the amount you pay and how often you pay it to suit your circumstances.

You can make a one-off payment into your pension or set up a regular payment by direct debit.

Don’t forget you get tax relief on your pension payments

You get tax relief on any payments you make into your pension up to £40,000 p.a. or 100% of your salary, whichever is lower. Basic rate tax relief is currently 20%, which means to get a payment of £20 into your pension, you only need to pay £16 and the government will top it up with tax relief of £4.

Even if you don’t pay tax, you’ll get tax relief on your pension payments of up to £3,600.

If you pay tax above the basic rate, you may be able to claim additional tax relief through your self-assessment.

Your new employer can also pay into your pension plan

If you’ve moved to a new job, you can ask your new employer to contribute to this pension plan rather than setting up a new one. You may find it easier to keep track of one pension than several and having just one pension plan could save you money on management charges.

However, you will need to consider what benefits or features you may be giving up under any new pension offered through a new employer.

Option 2 : Combining your pension pots

You may have a number of pension pots scattered around from previous jobs. If you do, it may be worth looking into combining them into one single pot.

A financial adviser will be able to advise you as to whether this could be a good choice for you, based on your personal circumstances.

You could save time and money by combining pension pots

  • Doing this could make it much easier for you to manage your pension pot. It could save you time and money. With only one pension provider to contact instead of several, you could find you spend less time on paperwork.
  • If you’ve moved to a new job, you can ask your new employer to contribute to this pension plan rather than setting up a new one. However, you will need to consider what benefits or features you may be giving up under any new pension offered through a new employer.

Keep track of how your money’s doing

If you choose to combine into one pension plan, you’ll also be able to easily see how it’s performing. We would send you a statement every year, should you choose to combine into your Aviva pension.

Normally no charge for transferring pensions

We normally don’t charge you if you decide to transfer your other pension pots into this pension plan. Neither would we usually charge you if you decide to transfer the value of this plan to another provider. There are some pension funds with specific conditions applying to them, please check with us to avoid any confusion.

Talk to a financial adviser

We recommend you talk to a financial adviser before combining your pension pots. An adviser will be able to assess your situation and make sure you’re not losing any valuable benefits by moving from one pension plan to another. If you don’t have a financial adviser, you can find one local to you at unbiased.co.uk.

Call us on 0800 145 5744 if you’d like to talk about combining pensions.

Option 3 : Not planning to pay in for now

Leaving your job can be a busy and stressful time, so you may want to leave everything as it is for now. That’s absolutely fine. It’s your pension and it’s up to you what you do with it. We’ll continue managing it and will send you a statement every year, so you know how your pension is doing.

You can restart payments at any time

You can change your mind and start paying into your pension again at any time. You can make a one-off payment or set up regular payments by direct debit from as little as £16. Just give us a call on 0845 900 0817 when you’re ready to restart your payments.

You can change the funds you’re invested in whenever you want

The funds you invest in affect the value of your plan, so you should keep an eye on how they’re performing. Remember that the value of your plan can go up or down even if you’re not paying in. You can call us to change the funds you’re invested in at any time; there is no charge for switching funds.

Things to remember if you’re leaving your pension plan alone for now

If you don’t do anything, you need to bear a couple of things in mind:

  • You won’t be regularly building up your pension pot for your retirement while you’re not paying into it. However it will still reflect the performance of the fund(s) it is invested in, which means the value could still go up or down.
  • You’ll still be paying charges on your plan. We’ll take these charges from the money in your pension, so the value may go down.
  • All of this may mean you have less money when you come to retire.

Talk to a financial adviser

It may be worth talking to a financial adviser to find out the best course of action for you. If you don’t have a financial adviser, you can find one local to you at unbiased.co.uk.

Option 4 : Thinking about retiring

You can retire at any time after you reach the age of 55. If you’re coming up to retirement, you might want to start considering what you want to do.

The recent changes to pension legislation mean you have more choices than ever before about what to do with your pension pot. Here are your four main choices:

  1. Take all your money as a one-off lump sum
    It’s important to remember you can only take up to 25% of your pension pot tax free. You’ll have to pay income tax on the rest of it at your marginal rate.
  2. Leave your money where it is
    You can leave it be and decide what you want to do later.
  3. Use some or all of your pension pot to buy an annuity
    This means you’ll get a monthly payment for the rest of your life, no matter how long you live.
  4. Withdraw your money as and when you need it
    You can take what you need when you need it and leave the remainder in your pot. The tax treatment will depend on when and how you decide to take your money. A financial adviser will be able to explain how this would work in your own personal circumstances.

You can also choose to mix and match these options. For example, you could take a tax-free lump sum of up to 25% and withdraw more money when you need it.

What if I don’t have enough money in my pension plan to retire?

If you think you can’t afford to retire, you can delay your retirement and continue paying into your pension plan. This could give you more money when you eventually retire. Alternatively, you could look at changing your retirement plans to take account of the income you’ll have.

Talk to a financial adviser

Deciding what to do with your pension pot is one of the biggest financial decisions you’ll ever make. It’s important you get it right, so if you’re not sure what to do, we strongly recommend you talk to a financial adviser.

A professional financial adviser can assess your situation and help you decide on the best course of action for you. If you don’t have a financial adviser, you can find one local to you at unbiased.co.uk.

Call us on 0800 145 5744 if you’d like to talk about your options at retirement.

Talk to a financial adviser

Pensions can be complicated. Because of that, we recommend that you talk to a financial adviser before you make any decisions about what to do with your pension.

If you don’t have a financial adviser, you can find one local to you at www.unbiased.co.uk.

Tools and calculators

Whether your retirement is still some time away or it is fast approaching, it's important to get a clear view of how close you are to achieving your aims. Our simple online tools and calculators can help you.

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WC03164 05/2016