Marcus is a fictional character created for illustrative purposes. His situation, decisions, and outcomes are designed to show how someone might approach an old workplace pension after a job change. This is not financial advice. Your circumstances will be different. Pension transfers can be complex. Always do your own research and consider speaking to a qualified financial adviser before making decisions about your pension.

The Person

Marcus is 34 and works as a civil engineer in London. He recently moved from a mid-sized consultancy where he had worked for three years to a larger firm offering a better salary and a stronger pension scheme. The move was straightforward and the right call professionally.

What he did not deal with immediately was his old pension.

He knew it was there. He had the paperwork somewhere. But pensions had always felt like something to sort out later, and later kept arriving without him actually doing anything about it.

Six months after starting his new job he decided that later was now.

What He Had

Marcus had been contributing to his previous employer’s workplace pension for three years. His old employer had also been contributing. He had not checked the balance since he joined the scheme.

He tracked down the paperwork, found the pension provider’s name, and logged into the old account for the first time in months. The balance was £22,400.

That number surprised him. He had vaguely assumed it would be a few thousand pounds, not enough to matter much. Seeing £22,400 sitting in a scheme he was no longer connected to changed how seriously he took the decision.

What He Knew at the Start

Marcus was reasonably financially literate. He had a Stocks and Shares ISA he contributed to monthly, a solid emergency fund, and a clear sense of his monthly budget. Pensions were the one area where his knowledge had gaps.

He understood the basics: pensions grew tax efficiently, his employer had contributed on top of his own contributions, and the money was locked away until he was 57. Beyond that the detail was fuzzy.

He did not know what his options were for the old pension, what the charges were on his old scheme versus his new one, or whether there was any reason not to move it. He also did not know what safeguarded benefits were or why they mattered.

The Options In Front of Him

Marcus read the pension guide on this site and established that he had three broad options.

Leave it where it is

The simplest option on the surface. The pension would continue to sit with the old provider, invested as it currently was, until he retired. He would manage two separate pension pots rather than one.

The downside was that he would need to keep track of an account with a provider he had no ongoing relationship with. He would also need to make sure the investment choices inside the old pension still made sense for his age and risk tolerance, which required checking.

Consolidate into his new employer scheme

Transfer the old pension into his new employer’s workplace pension. One pot, one provider, simpler to manage.

The question was whether his new scheme accepted transfers in, what the charges were compared to his old scheme, and whether the investment options were comparable.

Transfer to a personal pension

Open a self-invested personal pension (SIPP) and transfer the old pension there, giving him more control over investment choices and charges. This made more sense for larger pots or for people who wanted more flexibility than a workplace scheme offered.

Marcus noted this option but felt it was more complexity than he needed at this stage. He filed it away as something to revisit later.

The Questions He Had to Answer

Working through the options gave Marcus a clear set of questions to resolve before he could make a decision.

Did his old pension have any safeguarded benefits?

This was the first thing he checked, because he had read that certain pension benefits, particularly guaranteed annuity rates or defined benefit elements, could be lost on transfer and were potentially very valuable.

He contacted his old provider and asked directly. His old scheme was a defined contribution pension with no guaranteed annuity rate and no defined benefit element. There were no safeguarded benefits to worry about. He could transfer without losing anything of that kind.

What were the charges on his old scheme?

Marcus logged into his old pension account and found the annual management charge. It was 0.75% per year.

He then checked the charges on his new employer scheme. The annual management charge was 0.35%.

The difference of 0.40 percentage points sounds small. On a £22,400 pot it was around £90 a year. Over thirty years of growth, that difference compounded into a meaningful sum. Lower charges on the new scheme was a point in favour of consolidating.

What were the investment options on each scheme?

His old scheme offered a limited range of funds. The default fund was a lifestyle fund that automatically shifted to lower risk investments as he approached retirement. He had never changed it from the default.

His new employer scheme offered a wider range of funds including a low-cost global index fund that aligned with how he was already investing his ISA. That option appealed to him.

Was there an exit penalty on the old scheme?

He checked the terms of his old pension. There was no exit penalty for transferring out. Some older pension schemes do charge exit fees and this was worth confirming before assuming the transfer was straightforward.

What He Did

With his questions answered Marcus had a clear picture. His old scheme had no safeguarded benefits, higher charges than his new scheme, a more limited fund range, and no exit penalty. His new scheme was lower cost, offered better investment options, and would simplify his pension into a single pot.

He decided to consolidate the old pension into his new employer scheme.

He contacted his new employer’s pension provider and requested a transfer in. The process involved completing a transfer form, providing details of the old scheme, and waiting for the transfer to complete. The whole process took around six weeks from start to finish.

While he waited he also updated his expression of wishes on his new scheme, nominating who should receive the pension in the event of his death. He had not done this when he first joined the scheme.

He also made a note to check his pension once a year as part of an annual financial review, something he had not been doing before.

The Outcome

The transfer completed without issue. Marcus now has a single workplace pension with a balance of just over £22,400, invested in a low-cost global index fund, with annual charges of 0.35%.

Nothing dramatic changed. He did not suddenly become wealthy. But he went from having a pension he was ignoring to having one he understood, in a scheme he was actively contributing to, with charges he was comfortable with.

He also has a clearer picture of his overall financial position. His ISA, his emergency fund, and his pension are now all accounted for and intentional rather than a mix of active decisions and things he had been meaning to deal with.

The £22,400 that had been sitting unattended for six months is now part of a coherent plan.

What Marcus Learned

The pension was worth more than he expected. Assuming it was a small amount not worth worrying about was the thing that had kept him from dealing with it. Logging in and seeing the actual balance changed his attitude immediately.

Safeguarded benefits were the most important thing to check first. If his old scheme had contained a guaranteed annuity rate, transferring out could have cost him significantly. Checking took one phone call.

The charges difference felt small but compounded over decades into a real number. Understanding that made the consolidation decision straightforward.

The process itself was simpler than he had anticipated. The hardest part was starting.

He wishes he had dealt with it the week he left his old job rather than leaving it six months. The pension had not suffered from the delay, but the mental load of knowing it was unresolved had been quietly draining.

Guides That Helped Marcus

These are the pages on this site that cover the topics Marcus worked through:

• SIPP and Pension Investing
• Tax-Efficient Investing Order
• Pension and Life Insurance Beneficiaries
• Best Investment Platforms

What’s Next

Marcus dealt with a pension from a previous job. The next example is about something most people put off even longer: making a will and putting a power of attorney in place for the first time.

Marcus is a fictional character. His story is for illustrative purposes only. The decisions he made were based on his individual circumstances and do not constitute financial advice. Pension transfers can be complex and the right decision depends on your personal circumstances. Always do your own research and consider speaking to a qualified financial adviser before transferring a pension.