Gone are the days when you left school or university and stayed in the same job for the rest of your working life. These “jobs for life” are today generally constrained to the public sector, whilst most people who reach middle age will have had a number of different roles with different employers.
If you are in this position, then it’s likely that you will have contributed to various previous employer schemes, but are you aware of how much of your cash is sat in these schemes? In addition, do you know what the annual pension charge that's being deducted from your fund is, as it's quite common that once you leave an employer-funded scheme, the annual charges increase and can erode future returns. The other question you might want to consider is "where are my funds invested?" and "does this meet my own investment and risk comfort zone?" I will write more on risk strategies later.
Actions to consider :
1. Draw up a list of previous employers that you have worked for during your working life.
2. Contact these companies to establish that you have deferred pension entitlement and obtain a pension statement to confirm the current value or benefit you are entitled to.
3. There are likely to be two types of pension schemes you may have entitlement to. Final Salary (also known as Defined Benefit schemes or DB for short) or Money Purchase (also known as Defined Contribution schemes or DC for short).
There is a great free resource available to help you to achieve these steps, namely the Money Advice Service Pensions Tracing service – click here to be directed to this site - They have also put together a simple template that you can send to your previous employers to request this information here
I will discuss DC and DB schemes in more depth later, but the first step to taking control is to get an overview of the entitlements you have already built up from previous employers. Once you have this information the next step is to consider the options available to you and I will explore these in more depth in future articles.
Catch up soon (and please don't forget to subscribe to get my latest updates)