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What happens to my pension when I leave a company?

What happens to my pension when I leave a company? Does it gets shared out between the remaining “loyal” staff members?

No, the pension remains yours whether you stay or go.

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 pensions around

Do I have a pension?

If you worked at several companies it’s likely you do 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 also 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 and 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 happens to my pension when I leave a company?

Nice pension pot

What are the types of company pension?

There are basically 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 a calculation of your final or average salary over the course of 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 is not promising 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 companies. 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 important to keep your paperwork up to date.

What happens to my pension when I leave a company?

Nice and Tidy paperwork

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 well be surprised how much you have.

If you have serval pension pots after leaving companies, they may well 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 a guess at 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 main 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 company?

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.

For UK residents you can track down your old pension using the pension tracing service.

Remember it’s your money that’s out there in your old pensions.

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

Good luck out there. 

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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 as financial advice.  

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