What happens to small pension pots when I change jobs?

Full answer

Because auto-enrolment requires most employers to set up a workplace pension for eligible staff, and because pensions do not automatically transfer between jobs, most people build up a growing number of separate small pension pots over a working lifetime as they move between employers, each held with a different provider under different scheme rules. These small pots remain entirely the individual's own money -- they do not disappear or revert to the employer -- and continue to be invested and to benefit from any investment growth, but they are easy to forget about, especially years after leaving a particular job, and providers can struggle to keep in touch if the person moves house without updating their address. If you have lost track of an old pension, the free Government-run Pension Tracing Service can help identify the scheme and contact details using your former employer's name, though it cannot tell you the value of the pot itself. Many people choose to consolidate several small pots into a single SIPP or their current employer's scheme, which can make ongoing management much simpler, reduce the total number of separate charges being paid, and give a clearer overall picture of total retirement savings -- though it's important to check whether any of the old pots carry valuable guarantees, such as a guaranteed annuity rate or protected tax-free cash above 25%, before transferring, since these benefits can sometimes be lost on transfer and are often impossible to replace once given up.

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