Can I switch from my company’s pension if I am still working for them?

It’s usually possible to move away from your company pension. First, you need to consider what you could be giving up and what you might be gaining.

The quick and easy guide to switching your company pension

If you have a company pension and are thinking about moving it to a different scheme, this guide is for you. It looks at the difference between private and company schemes, what you can do if you have multiple pension pots and what to think about before giving up a guaranteed income for life.

The headline facts at a glance

Many company pensions allow you to leave at any point, being a current employee is not a barrier. With what’s called a ‘pension switch’, your savings are merely moved to a new scheme, similar to switching your bank account. It makes sense to get advice before deciding on any possible switch because if you have a good scheme it could be the most efficient way to save for the future. The big benefit of a company pension is that if you’re an active member your employer also pays in, and some schemes even provide valuable benefits like a guaranteed income for life. They aren’t all equally beneficial, though. Some may even be losing value, in which case a switch may be the best option.

Is a private pension better than a company one?

Quite simply, the right pension for you is the one that best addresses your needs. And for lots of people a company pension offers great benefits. What you need to remember is that if you are receiving contributions from your employer they can have a huge impact, in many cases they can double the amount you pay in. Your HR department should be able to tell you what that is if you aren’t sure. And if you have what’s called a final salary scheme, which gives you a guaranteed income for life, it’s often likely that you are better off staying put.

There are times when a switch is the right thing to do, though. You might want more control over how and when you access your pension savings, for example. It really depends on your personal circumstances, which is why you should talk to a financial adviser before making a decision.

Can you switch a pension that gives you a guaranteed income for life?

In most cases it’s possible to transfer away from a pension that guarantees you an income for life, such as a final salary scheme. Although, this is a big decision and it may not be the best thing for you to do. If you are a teacher or work in the NHS, armed forces, emergency services or civil service then you may have what’s called an ‘unfunded’ public sector pension, which you cannot transfer away from.

Won’t everyone have a company pension soon?

Not quite everyone, although certainly most people in paid employment. The government is rolling out auto-enrolment to qualifying employees. That will put workers into a company pension (or workplace pension, as they’re also known) if they are aged between 18 and 74, earn at least £10,000 and work in the UK. These will be modern schemes with low management fees, and there are minimum contribution levels for the saver and the employer. Right now these levels are a total of 2% of your salary, half of which is paid by your employer. These levels are expected to rise in 2018.

Can all pensions be switched?

If you don’t have an unfunded public sector scheme then the chances are you can switch your existing company pension into a new one. The real question is whether it’s a good idea, and to answer that you need to talk to a regulated financial adviser. That way, you can be sure of what the new pension offers and what benefits you might be giving up by leaving your existing one.

Making sure you have the best pension for your needs can be a complicated decision, especially if you would be sacrificing valuable benefits by leaving your existing company scheme. We have already helped thousands of people to make the right choices with their pensions, and we’re here for you, too. The best part is it won’t cost you a penny to find out what decision we think will give you the best possible future.

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Pension GuideWhat’s covered:

  • A deliciously quick overview of what types of pension you might have
  • The reasons why a transfer could be right for you
  • Industry phrases and what they mean
  • How our approach is different to most, if not all, financial advisers


More information…

There’s a lot to think about if you’re considering leaving your existing company pension, and this guide has looked at some of the main rules. We have also included below answers to some of the most commonly asked questions. And if there’s still anything you want to know, we’re only a phone call away.

If I change employers, can I take my pension with me?

Yes, this is usually allowed. If your new employer agrees, you can simply switch your existing pension into the new company one. Bear in mind, though, that depending on the type of pension you already have, this could mean giving up benefits like a guaranteed income for life. You may be better off leaving your existing pension as it is and joining the new company scheme as well.

I have lots of pensions from previous jobs, can I switch them into one? ­

Yes, some people like to combine all of their pensions into one single pot. There are various reasons for doing so, and two common ones are to reduce charges or simply to make it easier to keep track of your savings. A regulated financial adviser can tell you if this is right for you, and if it is they can also do the hard work on your behalf.

I’ve only been in my company pension for a few months, can I still switch?

Yes, there is usually no minimum amount of time before you are allowed to switch to a different pension..

Call 0800 304 7288 for a friendly chat about your pension

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