What Should You Do With an Old Work Pension?
When you change jobs or leave an employer, it’s easy to forget about the pension you built up during your time there. However, leaving money in old schemes without reviewing your options can lead to missed investment opportunities, high fee structures, or a lack of visibility over your overall retirement wealth.
If you have an old occupational pension scheme where you completed more than two years of service, you are fully entitled to retain both your own contributions and the contributions made by your employer.
Note on PRSAs: If your old scheme was a Personal Retirement Savings Account (PRSA), you benefit from immediate vesting rights. This means you own 100% of the funds from day one, regardless of how long you worked for the employer.
Your Primary Leaving Service Options
Once you leave an employment, your pension trustees or provider will issue a Leaving Service Options Statement. Broadly speaking, you have three main paths to choose from:
Option 1: Leave It Where It Is
How it works: Your money remains with the current provider, under the existing trustees, and stays invested in your previously selected funds.
Key details: Generally, no further contributions can be made to this scheme once you have left the company.
Best for: Individuals who are satisfied with the existing scheme's fund performance, fee structure, and management, and prefer not to make immediate changes.
Option 2: Transfer Out to an Individual Structure (PRB or PRSA)
If you want to take direct control or disconnect your retirement savings from your former employer, you can transfer your fund into an individual structure held in your name.
Personal Retirement Bond (PRB): Moves your funds into an individual policy held directly in your name, completely severing ties with your previous employer. It replicates the rules of your initial scheme, grants access to a wider range of investment funds, and offers flexible options like access from age 50.
PRSA (Personal Retirement Savings Account): Transfers funds into a flexible PRSA structure. These can be segmented across more than one PRSA, giving you the flexibility to draw down income in stages (phased retirement).
Option 3: Transfer to Your New Employer’s Scheme (Direct Consolidation)
How it works: If your new employer offers an occupational pension scheme and its trustees accept transfers, you can roll your old scheme directly into your new workplace plan.
Key details: Your old pot is merged into your new account, bringing all active and past employment contributions under one single roof.
Best for: Employees looking to keep their retirement savings as simple as possible by holding all current and past funds in one single workplace portal.
To Consolidate or Keep Your Pensions Separate?
Whether you consolidate (Option 3 or merging into a single PRSA/PRB) or keep separate pots (Option 1 or Option 2), each approach comes with trade-offs:
Benefits of Keeping Pensions Separate
Flexible Drawdown (Age 50+): Retaining separate schemes gives you the ability to access specific pots independently from age 50 onwards, rather than triggering drawdown across your entire retirement savings all at once.
Investment Diversification: Spreads your investment capital across different product providers, fund managers, and asset classes.
Estate Planning: Keeping separate structures ensures death benefits remain intact and can provide greater flexibility when planning how benefits pass to your estate or beneficiaries.
Benefits of Consolidating
Simplified Admin: Merging past pensions into a single pot dramatically reduces paperwork, logins, and annual reporting hassle.
Lower Charges: If your new scheme or targeted consolidated account benefits from lower annual management charges, merging funds can save significant money in fee drag over time.
Potential Drawbacks of Consolidating
Loss of Independent Access: Once funds are merged into a single arrangement, you lose the option to access or retire individual pots at different ages or stages.
Redundancy Impact: Transferring funds out of specific occupational schemes can negatively impact calculations for tax-exempt redundancy lump sums (such as the Standard Capital Superannuation Benefit / SCSB).
Death Benefit Restrictions: Consolidating might limit certain scheme-specific death benefits that were locked into older occupational structures.
Summary
Before making any decisions regarding an old pension:
Review your Leaving Service Options Statement to verify your fund value, performance, and transfer options.
Compare fee structures between your old employer scheme, new employer scheme, and private transfer options (PRB / PRSA).
Assess your retirement timeline to evaluate whether keeping pots separate for phased drawdown (from age 50) or consolidating for simplicity fits your long-term goals best.
Disclaimer: Pension decisions depend heavily on your personal tax circumstances, age, and retirement objectives. It is always recommended to consult with a qualified, independent financial advisor before executing a transfer.