5. How to avoid losing your pension in the future
With millions of pounds being left unclaimed because people have lost track of their pensions, it is important that, if you want to maximise your retirement funds you keep track of where your pensions are. Whether you have a workplace pension, a personal pension or a combination of both, here is our general guide to making sure you don’t lose track of your pensions.
Keeping track whilst you are working for an employer
One of the biggest reasons for people losing their workplace pension is moving jobs. With people moving jobs far more frequently nowadays than did previous generations, it is important that you keep track of your pensions as you could end up with a multitude of pensions from a variety of providers with no clue as to how many pensions you actually have.
- Keep a detailed record of your employment history including all correspondence, salary slips showing contributions and any other communications that relate to your pension.
- Keep the documentation that explains the pension plan you are in including its investment policy and details about the various benefits you may be entitled to such as death in service benefits.
- You will probably receive an annual update of your pension. Its format will vary as to whether you have a final salary or defined contribution scheme. It will give you an estimate of your benefits at retirement age and a valuation and estimate of your pension pot should you have a defined contribution scheme. You should always keep hold of each of these updates.
- If you move house, always notify the pension company. Do not assume that just because it is a work scheme your employers will do so.
Keeping track if you leave and go to work for another employer
It is important that you decide what to do with your workplace pension if you move to another employer. You should take financial advice to check whether it is worth moving the pension to your new employer's provider or is better to leave it where it is. If you do decide against moving your pension then you need to ensure you keep track of it once you have left the company.
Keep all your paperwork and store it with your most valuable documents i.e. those that you will not destroy in the future such as your will, house deeds etc.
Inform your old pension provider of any changes to your address or telephone number immediately. You need to be contactable should there be any changes you need to be made aware of.
Keep track of your former employer. This will help keep you abreast of any changes you need to know about. The business may merge with another, be sold or even go out of business, all of which can have an effect on your workplace pension.
Our guide above concentrates mainly on workplace pension because these are, in theory, the easiest to lose track of, as you may change provider each and every time you move jobs, leaving you with a variety of pension pots from different providers.
If you have a personal pension, this can stay with you regardless of your employer and you should simply update the pension provider of any changes of address or personal details.