How will changing jobs affect my pension?

When you change jobs you should be able to transfer your company pension plan to a new employer’s scheme or to a stakeholder pension or personal pension. Alternatively, you can leave it where it is, known as deferred membership.

As a deferred member, you can still join your new employer’s pension scheme. However, you usually have to stop paying into a deferred scheme and may not be entitled to some benefits. For example “death in service” benefits may only apply to members still employed by the company.

If your company pension is a defined benefit scheme, your fund will be revalued regularly to keep up with inflation. If it is a defined contribution scheme, it will continue to be invested and you will get statements and forecasts on how it is performing.

When you transfer to a new pension scheme, the benefits you have built up in your old scheme are converted into a monetary value, known as a cash-equivalent transfer value, which goes into your new pension.

Depending on the type of pension scheme you have, it is possible that you will have to give up some benefits. Your new employer may offer you an inducement known as a transfer incentive to make up for this.

But as there may also be charges or administration costs involved in transferring it is important to weigh up the pros and cons and get independent advice before coming to a decision about what is best for you.