What if I change jobs?

If you have a personal pension or stakeholder pension, you can take it with you if you change jobs. This is helpful if your work means that you often change jobs.

If this applies to you, you should tell the company providing your personal pension when you change jobs. You may also find it useful to tell your new employer that you have a personal pension, and think about asking them whether they will pay towards it. Keeping your employer and pension provider up to date with your employment situation will help to make sure that the Inland Revenue works out your National Insurance contributions correctly.

If your new employer runs an occupational pension scheme, it is often in your best interests to join it. But, before you decide to join your new employer’s occupational pension scheme, you will need to think about what to do with your personal pension. You have the following options to think about.

• Stop paying into the personal pension. If you do stop, you will probably still have to pay charges. You might even have to pay extra charges because you have stopped paying into the personal pension.
• Transfer your personal pension into the occupational pension scheme. You need to decide whether you should close your personal pension and transfer it to the occupational pension scheme, though only if your occupational pension scheme will allow you to do this. Most personal pension providers will charge you for this, so it is important to talk to your new employer, your financial adviser and your personal pension provider before you make a decision.
• Carry on paying into your personal pension. You can pay into a personal pension, a stakeholder pension and an occupational pension scheme, and get tax relief on your contributions. But there is a limit to the amount that you can pay. This does not affect the arrangements for contracting out of the additional State Pension. You can still only contract out using one pension – either your occupational pension, your stakeholder pension or your personal pension. For more information, please see Personal Pension Schemes (including Stakeholder Pension Schemes) – A guide for members of tax-approved schemes (IR3). Click here for details about how you can get a copy of this leaflet.

If you decide to join an occupational pension scheme which is contracted out, the Inland Revenue will stop paying minimum contributions into your personal pension. Instead, you and your employer will pay a lower rate of National Insurance contributions. You should ask your personal pension provider for form CA1543. Fill it in and send it to the Inland Revenue at the address shown on the form. This form tells the Inland Revenue that you are no longer contracting out through an appropriate personal pension.

Before making a decision, you may want to talk to a financial adviser and your new employer. But remember, if you see an adviser you may have to pay for their advice.