What happens to my pension when I leave a company? (What you need to know)

What happens to my pension when I leave a company?

Does it get shared out between the remaining loyal staff?

Your pension remains your pension when you leave a company. Generally, it sits where you left it until you tell your company or pension provider what you want to do with it. It will likely stay invested the way you set it up until you take action to transfer or start accessing it in accordance with access rights.

So you have decided you can’t take it anymore.

It’s not you, it’s me! And I am leaving (or you are being asked to leave!)

But now that you are leaving what happens to that pension pot you have built up over several, days, weeks or years?

“Money, if it does not bring you happiness, will at least help you be miserable in comfort.”

Helen Gurley Brown

What happens to my pension when I leave a company?
Just moving my pension aorund

Do I have a pension?

If you worked at several companies, you do likely have a pension/s with all or a number of them – unless of course, you opted out in one way or another when you could do that.

The best way to track this down is through wages slips, P60’s, P45’s and any induction or contractual information. These types of documents should detail if any payments were being deducted and put into a pension and or information about the company pension.

So, it might be time to do some life admin to find this info and order it into the companies you worked for.

“The trick is to stop thinking of it as ‘your’ money.”

IRS auditor

Auto enrolment pensions

From 2018 in the UK it became compulsory for every company to enrol their staff in a pension. This was called auto-enrolment. It would have happened to you if you were between 22 and pension age and earning over £10,000 a year.  

The upside of this was that your company would add a small or larger percentage (FREE MONEY) to your pension contribution. You have to make a minimum of 5%, and they have to contribute a minimum of 3%

Any contribution you make also benefits from tax relief, i.e. you won’t be paying tax on that part of your income. So, another boost.

You can opt-out of a company pension, but you will need to review how this short-term gain in pay might lead to long-term pain later on when you have little or no pension savings.

“Money is the best deodorant.”

Elizabeth Taylor

What are the types of company pension?

There are two types of company pension.

Firstly a defined benefit pension. Where the benefits or payment at the end were defined, i.e. you would have a reasonable idea of what you would get in retirement. Usually based on calculating your final or average salary throughout your work.

Defined benefit pensions are very rare now as it has proved to be too expensive for companies to guarantee an income way into an unknown future and with people living longer and longer. A longer life being an inconvenience to the pension companies but better for you (providing you don’t run out of money)

Secondly, there are defined contribution pensions. This is more or less what it says on the tin. What you get at the end is defined by what you put in and the rate of return you get on your investments. In essence, this means the risk of the outcome has been transferred to you because the pension company does not promise anything anymore.

It’s still my pension when I leave the company, right?

Your pension remains yours whether you still work at the company or have moved on. The pension is in your name, not the company. Your pension should sit there until you decide what to do with it.

There might be some small nuances if you leave very early after starting, which may allow you to access or transfer the funds, but you would need to check with the company for what is possible.

Either way, the pension should still be yours when you leave the company.

This is why it’s essential to keep your paperwork up to date.

Your pension may be your life savings

It’s important to track and trace your pensions when you leave a company, as this may well be where most of your life savings are!

If you have worked for a few years or decades contributing to a pension, where you may have been more or less forced to save, you might be surprised how much you have.

If you have several pension pots after leaving companies, they may add up to more than you think.

If you lend someone $20, and never see that person again, it was probably worth it.

Author Unknown

What happens to my pension when I leave a company?

Having your pension and eating it

Find your old pensions

Get a piece of paper out with a pen/pencil, write down all the places you have worked and guess how long.

Dig out the paperwork for these old jobs. Payslips, P60’s, P45’s, contracts and job descriptions.

Track down the company HR contacts or primary phone number/website and see if you have a pension with them.

Your pensions are part of your net worth, everything you own – everything you owe and will likely play a bit part in a comfortable or otherwise retirement when you can’t or don’t want to work anymore.


Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the “gotta have it” scale.

Zig Ziglar

Summary: What happens to my pension when I leave a job?

Your pension remains your pension.

You could leave it where it is or move it to your new company. You may need to seek financial advice on this.

Keep your financial paperwork neat and tidy, especially pay and pension statements so you can track down your pensions.

You can track down your old pension using the pension tracing service for UK residents.

Remember, your money is out there in your old pensions.

So the question of what happens to my pension when I leave a company depends on what you want to happen and what you actually do about it. 

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Pension rules keep changing. Investments can go up and down, and you could get back less than you put in. This information should not be considered financial advice.  

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