What happens to my workplace pension if I leave a job within two years?

Full answer

What happens to your pension when you leave a job early depends heavily on the type of scheme and, for some schemes, on exactly how long you were a member. **Modern defined contribution (DC) workplace pensions** For the vast majority of people auto-enrolled into a workplace DC pension (for example NEST, Now: Pensions, Smart Pension, or a group personal pension), once the one-month opt-out window has passed, your contributions and your employer's contributions belong to you permanently. If you leave the job after two months, two years, or twenty years, the pot stays invested in your name. You cannot get it refunded as cash (except in narrow, small-pot circumstances from age 55), but you also do not lose it -- it simply becomes a "preserved" or "deferred" pension that continues to grow until you access it in retirement, or you can transfer it to a new employer's scheme or a personal pension. **Older schemes and the two-year rule** Some legacy occupational pension schemes, and certain defined benefit (final salary or career average) schemes, still apply an older short-service rule: if you leave with less than two years' qualifying service, the scheme may only be obliged to refund your own contributions (not the employer's), minus a flat-rate tax charge (commonly 20%) on the refund. After two years' service, you would instead be entitled to a preserved pension based on your service, payable from the scheme's normal pension age, or a transfer value to move to another arrangement. **Worked example: DC scheme, six months' service** Marcus is auto-enrolled into his employer's NEST pension, contributes for six months, then changes job. His pot (his own 5% contributions plus the employer's 3%, roughly £900 total) stays invested in NEST. He can leave it there, transfer it to his new employer's scheme, or consolidate it into a personal pension later -- but nobody can force a refund and it is not lost. **Worked example: older DB scheme, 18 months' service** Priya was a member of an older-style defined benefit scheme for 18 months before leaving. Because this is under two years, the scheme rules only require it to refund Priya's own contributions (say £2,700), less a 20% tax charge, giving her roughly £2,160 back. The employer's contributions are retained by the scheme, and she does not get a preserved pension for that short period of service. **What to do if you are unsure** Check your scheme's member booklet or ask the scheme administrator whether short-service rules apply, and track down any small pots from previous jobs using the free government Pension Tracing Service. For most people with modern auto-enrolment pensions, the safe assumption is that nothing is lost -- it simply becomes a deferred pot to consolidate or leave where it is.

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