Keeping your pension together

What you should be doing about your retirement today

Retirement is a long way off for many readers however there are steps that you should be thinking about every time you change jobs in order to save time and money when you finally reach retirement age:

In our parents generation the typical job route was to find an employer and stick with them for life. Once you retired then your former employer looked after you indefinitely.

Gone are the days of the defined benefit pension scheme

Sadly those days are gone for a number of reasons:

1) Companies can no longer afford the liability of sustaining all ex employees in their retirement especially now that people are living much longer into old age than in past generations

2) Our generation do not tend to stick to one employer for life. A career nowadays is made up from on average seven different jobs 

The problem of multiple pension pots

The result is that our generation are likely to reach retirement with multiple pension pots from different employers with different pension providers. The difficulty with this situation is that your total pension pot may be difficult to track given the multiple login details required for each pension provider. In addition, once you reach retirement you need to start the process of consolidating all of your various pots - hopefully you haven't lost any of the details over the last 35-40 years of working.

Considering the above I have reached the following conclusion for our generation. Every time you move jobs one of the first items on your agenda other than work and pay is to ensure that you're signed up to the Conpany pension scheme especially if the Company are matchin contributions. You should maximise your contributions up to the point when the Company ceases matching. 

Once you receive your pension information through the post you need to get in touch with your pension provider. Firstly to ensure that you are not invested in the default pension fund but instead are investing in something slightly more aggressive (assuming you have 20 plus years before you retire). Secondly you need to ask the pension provider what steps you need to take in order to consolidate your pensions. This will normally involve filling out a short form that includes details of your previous pension provider and the plan number.Your new pension provider will do the rest in terms of ensuring that the money is transferred.

The entire process is very easy to initiate and takes roughly 20 minutes start to finish (although the actual process of the transfer may take a few weeks - although this occurs in the background). It will save you days of time in the long run and ensure that none of your pension pots are lost along the way to retirement.

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