With advancements in remote working facilities and communications, improved transport infrastructure, and easier access to online training, changing jobs has never been more straightforward. However, changing jobs frequently can give you an increased amount of administration, particularly if it involves relocating to a new city or country.
In the excitement and high activity levels around job changes, one thing that tends to get overlooked is the workplace pension. If you misplace, lose, or forget about your workplace pension, you could potentially lose out on tens of thousands of pounds in pension contributions.
Therefore, we have written this short article to inform you about opting into a workplace pension and, more importantly, keeping track of them.
Workplace Pensions – Opting-In
The good news is that you will be automatically entered into a workplace pension when you start a new job. Therefore, there is no hassle for you on this front.
You can thank the government for this ease of entry into workplace pensions. They introduced legislation compelling employers to enrol their workers into a workplace pension automatically. This process is known as auto-enrolment.
However, there are specific criteria you must meet to qualify for enrolment into a workplace pension in the UK. You must be:
- Earning £10k or more per year.
- Aged at least twenty-two.
Being enrolled in a workplace pension means you are preparing yourself financially for your retirement years.
Workplace pensions are an excellent vehicle to help people save for the long term, they are hassle-free, and you are automatically enrolled in them. However, you don’t need to remain within a workplace pension scheme, and you can opt out at any time.
There are various reasons why you might consider opting out, but you should not take this decision lightly. There are significant financial benefits to workplace pensions.
For instance, your employer will top-up your pension contributions with a further 3% of the value of your salary. You will also benefit from receiving tax relief on your contributions, effectively boosting them by another 1%.
Therefore, unless it is absolutely essential, you should stick with your workplace pension.
Get Your Pension Checked
Saving into a pension scheme to help secure your financial future is excellent. However, merely putting money into a scheme is insufficient; you must regularly check that your investments perform as expected.
Pensions can seem complicated to understand. Therefore, you might consider speaking with a regulated financial adviser to help you make these checks. They can also help you assess your overall financial situation and recommend the best options for ensuring you have a comfortable retirement.
Previous Workplace Pensions
It is unlikely that workers will stay with the same employer for their entire careers in the modern working environment. Therefore, many people will have several workplace pensions of various sizes, dotted around different pension providers.
Some of these might contain a relatively small amount of money, and others could have considerable value. Regardless of the size of these funds, the money belongs to you, so you should make an effort to track it down. Otherwise, you risk losing it.
It is incredible the amount of unclaimed pension money is out there. One estimate from Which is that there is almost £20 million lying unclaimed in dormant pension funds. With just a brief check back through your working career, you can put some of this money back in your pocket.
If you have lost your pension details or can’t remember your pension provider, all is not lost. You can go to the gov.uk website and use the government’s free Pension Tracing Service to help you. All you need are some basic details to get started.
Workplace pensions are a fantastic way of saving for your retirement. Auto-enrolment makes them hassle-free, and you’ll also benefit from employer contributions and tax relief. However, you must keep an eye on their performance, and using a regulated financial adviser is an excellent choice to help with this.