Finding, transferring and combining your pensions

If you’ve had more than one job, you’re likely to have accumulated a number of pension pots. Since 2012, when auto-enrolment was introduced in the UK, it’s been mandatory for employers to pay into a pension on your behalf – unless you opt out. Meanwhile if you’re self-employed, you may have paid into a private scheme and want to know whether it is still the best choice for you. This article explains how to find, transfer and combine existing pensions.

Benefits of tracking down

Tracking down a pension ensures you don’t not miss out on savings that could help give you a comfortable retirement.

You can also see where your money is invested and check you’re not overpaying any fees.

How do you track down a pension? A step-by-step guide

Locating a pension can be straightforward if you know the details of the provider and your policy number. However, pension schemes often merge or get taken over, so it can be hard to keep track of who’s managing your money.

Here’s what you need to consider:

1. What pension did you have?

Think of all the employers you’ve worked for. Did you pay into a pension through the company?

You will either have paid into:

A defined benefit scheme (also known as a final salary scheme), which pays a guaranteed lifetime income in retirement.
A defined contribution scheme, where the value of your pension on retirement is based on the amount you’ve paid in and the performance of your investments.

If you’re self-employed, think back to any payments made in the past. You will have paid into a defined contribution pension managed by an investment company, or you will have managed your own investments through a self-invested personal pension (SIPP).

2. Search correspondence

Find any paperwork that might reference a pension, and search your personal email address for details relating to any scheme.

If you’ve found the paperwork, it should specify the provider (the company managing the pension scheme) and your policy number.

3.Make contact

Contact the provider using the phone number or email address provided, and be prepared to pass over details such as your date of birth, address and policy number for verification.

If you need help requesting information, the government-backed MoneyHelper site (formerly known as the Money Advice Service) has a free template letter to complete and send, by post or email.

4.If you’re struggling

If you don’t know the pension provider, ask your former employer for help.

If you’re struggling to contact your old company for any reason, the government has a free tracing service. The Pension Tracing Service will search a database of more than 200,000 pension schemes to locate the contact details you need. You can also call the service on 0800 731 0193.

If you had a defined benefit pension, and your old employer has since gone bust, no longer exists, or is struggling financially, then the pension may have been taken over by the Pension Protection Fund. Check the fund’s website to see the full list of the pension schemes it manages.

How do you transfer an old pension?

There are a number of reasons why you might want to transfer an old pension into another scheme. Reasons could include: going through a divorce, moving overseas, the scheme is being wound up, or because you want more control and flexibility over your money.

If you have a defined contribution pension, the transfer process should be fairly straightforward.

But if you have a defined benefit pension, the rules are more complex, as we explain below.

1. Be aware of the rules

The government has strict rules around transferring defined benefit (final salary) pensions. This is to help consumers avoid a decision they may later regret, particularly if valuable benefits are being sacrificed (such as a guaranteed retirement income or guaranteed annuity rates).

If you’re giving up benefits valued at more than £30,000 then you have to seek financial advice. Contact your scheme’s administrator to find out how much your pension will pay out.

If you’re looking to transfer a defined contribution pension, you don’t have to seek advice – but it’s crucial to check you’re not losing out on a good deal by transferring between providers.

2. How to transfer my pension

If your safeguarded benefits are worth less than £30,000, then you can request a transfer yourself without advice. Simply send a completed transfer form, stating where you want the money to go, to the company managing your scheme.

If you have benefits worth above £30,000, you will need to include confirmation you’ve received financial advice when you submit your form. This must have been given within 3 months of receiving your pension’s benefit value.

The trustees running your defined benefit scheme will give you a final cash equivalent transfer value, and the money can then be moved elsewhere. The process can take a total of 9 months.

3. Are you allowed to transfer?

Since April 2015, some public sector pension schemes (including those for teachers, the civil service, police, NHS and armed forces) have no longer allowed transfers out.

Benefits of transferring

You need to think really carefully about what you might lose if you’re considering transferring a defined benefit pension.

If you transfer, you’ll be putting it into a defined contribution scheme. This will give you a pot of money to spend or invest as you wish, but you will lose the certainty of a guaranteed income in retirement. If you make decisions you later regret and end up losing your money, there’s no going back.

However, transferring can give you more flexibility with your money.

Take care not to fall for a pension scam. The Action Fraud website has more information on this

Benefits of combining

If you have several defined contribution pension pots, you may want to combine them all in one scheme so it’s easy to keep track of your savings.

You can also move pensions to a scheme with potentially lower fees or a wider range of investment options to suit your needs.

Before combining pots, check you’re not losing access to valuable benefits through a defined benefit scheme. Also check you’re not going to be hit with hefty exit penalties.

For more guidance, contact MoneyHelper (formerly called The Pensions Advisory Service).

How to combine pensions

If you’ve decided to combine your defined contribution pots, here’s what to do:

Contact your new or current provider and let it know you want to transfer another pension into your existing plan. Provide as many details as you can – for example, the provider the pension is with, your policy number, and a rough amount of how much is in the scheme.

Your new provider will then contact the company managing the pension and do the transfer process for you.
You’ll be updated throughout the process and will be told when it’s complete.