If you have previously worked in a company(s) that offered a pension as part of their employment package and either you, your company or both parties contributed into this pension for over a 2 year period, then you may have a accumulated a considerable pot of money.
Once you leave a company, you have 3 options in relation to your pension they are as follows
- Leave it where it is, in the Previous Company Pension
- Transfer it out into your New Employers Pension Scheme
- Transfer it into a Buyout Bond into your own name.
These 3 options all have their advantages and disadvantages and there is no definite correct answer for all cases. It is important for you to research your options and choose the best one that suits your circumstances.
Due to legislation changes in 2016, many ex employees have been offered ‘enhanced transfer values’ on their pensions from previous Employers. It has meant that early access to pension money could now be a viable option for you.
Occupational/Company Pension Schemes are usually one of 2 types;
- Defined Contribution Pension Schemes
- Defined Benefit Pension Schemes
These 2 types of pension schemes are quiet different in how they calculate the pension entitlements for their employee and ex employees. In relation to ex employee’s pensions, please see below a brief explanation of both of these schemes and the various options available to you;