What should I do with my work pension when moving jobs?

What should I do with my work pension when moving jobs?

 

What should I do with my workplace pension when moving jobs?

When you move jobs, the important thing is to remember the details of the pension you had with your previous employer.

Keeping track of old workplace pensions makes it easier to see how much you’re building up in your pension pot/pots.

Most people will have a defined contribution workplace pension, and we’ll focus on this type of pension.

If you happen to have a defined benefit workplace pension, the default guidance is to leave it where it is until you pension provider allows you to access the money. This is because of the valuable benefits this type of pension offers.

In terms of your options with old pensions, there are a few things you could do:

Option 1: Leave your old pension where it is

Doing nothing with your old pension is an option. Just make sure you keep the details safe so that you can easily find it later when you need to. At the very least, make a note of the pension provider and your account number.

Unfortunately, as many of us move jobs more than once during our career, the ‘do nothing’ option can actually end up leaving you with a lot of admin in years to come.

And with over £19 billion sitting in lost pensions, keeping track of old pensions may be harder than you think.

Option 2: Transfer your old workplace pensions into your current workplace pension

If you’ve moved to a new employed role (as opposed to self-employed), you will automatically enrol into a new workplace pension.

A workplace pension can usually receive transfers in from other pensions. So, you might want to consider transferring your old pension to your new one. This makes it easier to manage, with all your pension funds in one place.

Option 3: Open a SIPP

You could open a Self-Invested Personal Pension if you wanted to take a more hands-on approach with your old pensions going forwards. And you can have a SIPP alongside your current workplace pension.

Option 4: Transfer your new workplace pension into your old workplace pension

Just because you move jobs, it doesn’t mean you can’t keep paying into the pension you had with your old job. Your old employer won’t be making any contributions into it anymore, but the pension is still open and able to accept payments into it.

This option is less common, and for somebody wanting to take a more hands on approach with their pension. There could be a variety of reasons for using this option.

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Things to think about when deciding what to do with your old pension

Fees

Higher pension charges eat into your returns.

Comparing the costs of your pensions can have a big impact on the long-term value of your pension.

As an example, a difference of 0.5% vs 1% fees a year on a pension worth £20,000 could mean a difference of nearly £5,000 in 20 years’ time, based on average returns of 5% a year.

In fact, if you happen to have a very old pension, you may find fees are a lot of higher than newer ones. Pension fees have come down over time as more pension providers have entered the market.

Transfer charges

The provider of your old pension may charge a transfer fee if you move it to your new pension.

There are a couple of rules for certain pensions:

  • If you’re transferring a pension after the age of 55, fees are capped at 1% of the value of the pension transfer
  • If you open a new plan, you can’t be charged a transfer fee at all

If you’re in any doubt about potential fees to move your pension to another provider, double check.

Loss of guaranteed benefits

Less common for newer pensions, you may have a guaranteed or enhanced benefit on your old pension. This could be something like enhanced tax-free cash or a Guaranteed Annuity Rate.

When you transfer a pension with guaranteed benefits to a new provider, you may lose your right to these benefits.

Again, a simple question to ask your pension provider is ‘Will I lose any guaranteed benefits if I transfer’?

Investment choice and attitude to risk

When you move jobs, your new pension provider will probably put you in what’s known as a ‘default fund’. This is an investment that matches the level of risk to your time until retirement. The younger you are, the more risk it assumes you can take. As you get older, the investments are updated to account for a lower amount of risk you should take.

With a default fund, you may find that the risk level reduces quite a lot just to be on the cautious side. For somebody with a riskier attitude to investing, you may find that a default fund is not suited to your needs.

This is where fund availability can be useful. Some pension providers will have access to thousands of funds, giving you plenty of choice. Others may only offer access to a handful of funds.

For somebody in the later stages of their career, you might want to take a more active approach with your pension investments and benefit from a pension with a large choice of investments.

Summary

When you move jobs, the worst thing you can do is forget about your old pensions.

Pensions are all about investing for your future. Taking the time to get your old pensions in order could make a big difference to your retirement plans. If you have large pensions, you might want to take professional advice before deciding to do anything.

If you want to receive guidance and support for workplace pensions at your organisation, book a free Financial Wellbeing Lunch & Learn for your workplace.

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Why Floqast needed financial wellbeing for a diverse workforce

Why Floqast needed financial wellbeing for a diverse workforce

 

“We needed financial wellbeing to suit a diverse workforce.”

 

Floqast is a fast-growing accounting software vendor with over 500 employees, based in several offices across the globe. Tanisha Valton, HR Business Partner, is passionate about ensuring the pace of work and innovation at Floqast is matched by the organisation’s commitment to employee wellbeing, and she helped bring in Bippit after financial wellbeing was identified by employees as an area they wanted more support in.

 

 

How financial wellbeing became a priority

Floqast asks their employees directly what is most important when it comes to wellbeing. Why? Because the company wants to make sure their wellbeing offering remains reflective of what their people actually need, and of the organisation’s demographic makeup. In 2021, at the height of the pandemic, they sent out a survey asking staff where they should invest in 2022.

Financial wellbeing came out very strongly, unsurprising considering the household income shocks precipitated by Covid-19, but this sentiment was further fuelled internally by the cost-of-living crisis.

“The cost-of-living crisis affected everyone, not just those on lower salaries. We believe that having money is one part of the puzzle: if you don’t have the correct money management tools in place, salary increases do not always translate to long-term benefit.”

 

 

 

Why Floqast needed support that went above and beyond

Because Floqast is in the accounting industry, many of their employees are probably savvier than the average person when it comes to money management. This meant Tanisha needed a solution that went beyond basic education and provided a high level of support to the employee base, many of whom are looking to buy houses, start families or are facing other big financial decisions.

Tanisha reviewed the market and was drawn to Bippit firstly because the product is suitable for employees making decisions at all life stages. But also because Bippit offers employees access to professional coaches with FCA-recognised qualifications who can provide guidance that is personalised to the individual’s existing knowledge. This meant she knew Floqast’s savvier workforce would get the right level of support. So far, 26% of Floqast employees have interacted with one of Bippit’s expert coaches.

Additionally, Tanisha liked that the Bippit platform features multiple products in one place, making it an all-in-one financial wellbeing solution. Employees only ever need to go to one location when they need support with their money.

“Some of our employees really, really love it. It’s also been popular with our expats. It’s really helpful for them to understand how UK finances work so it can help frame their decision on whether they want to move to the UK for good.”

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Building the business case for financial wellbeing

At Bippit we find that aside from the whole-of-workforce benefits that our financial wellbeing platform brings, many organisations use it to engage a particular cohort to achieve a specific goal. Another of our clients, for example, has a regular early-years graduate cohort with underdeveloped money management skills. This allows Bippit to help graduates have the best possible start to working life.

When it came to building the business case for Bippit, Tanisha used the survey results as the main lever. She sold the concept into senior management by showing how Bippit could support total compensation and help employees make the most of their salaries at every stage of their lives.

“Our strategy for comms is based around our wellbeing pillars: health & wealth, work-life balance, and workplace community. That’s how we think about our benefits and wellbeing strategy and it’s also how our employees understand it.”

Keeping employees aware of the support availble

Tanisha is passionate about increasing uptake of benefits, and like many HR professionals that successfully turn the dial on wellbeing, she knows that keeping wellbeing support front-of-mind is critical because you never know when employees might want to take advantage of what’s on offer.

“Employees need quarterly refreshers, webinars, emails – it has to be on their radar,” says Tanisha. “Our highest utilisation and highest engagement is with benefits we send out regular comms and reminders for so they always think about the service. What’s the point of spending the money if no-one is going to use it?”

“Our strategy for comms is based around our wellbeing pillars: health & wealth, work-life balance, and workplace community. That’s how we think about our benefits and wellbeing strategy and it’s also how our employees understand it. We’re aligned on that.”

What’s next for Floqast?

Floqast takes advantage of times when everyone is thinking about wellbeing to flag what support they offer and how it’s applicable to different cohorts.

“So for Mental Health Awareness week, we shouted about all our benefits for mind and body. For Pride month we’ll talk about how diverse our Bupa cover is and how our fertility cover isn’t just for straight couples but for everyone.”

This approach, of letting your comms ride the wave of events and ideas that are already in employees’ minds, is an approach that Bippit recommends. There’s still a taboo around talking about money, and using occasions where people may naturally be thinking and talking about money are good ‘piggyback’ to show how you support your employees to improve their long-term financial wellbeing.

If you want to improve your team’s financial wellbeing, book a free Financial Wellbeing Lunch & Learn for your workplace.

Ready to explore how Bippit can

support your team?

How Mando is using Bippit to get buy-in for employee wellbeing

How Mando is using Bippit to get buy-in for employee wellbeing

 

“To get buy-in for employee wellbeing, you must win hearts and minds.”

Mando Agency is a team of 50+ creatives based in Liverpool. Deanne Walsh, HR and Wellbeing Lead, instinctively understands that human capital is the agency’s differentiator, while appreciating that there’s a direct link between wellbeing and performance for both the organisation, and the individuals within it. That’s why they invested in financial wellbeing through financial coaching platform Bippit.

Why the time was right for financial wellbeing

Financial coaching came through very strongly when Mando Agency conducted an employee survey during the height of the pandemic. They knew they wanted to bring in a new solution, but wanted to make sure it was one that would get trust and engagement from staff.

“We’ve tried different initiatives and don’t always get the engagement,” says Deanne, “but with Bippit we’re already at 35% adoption a few weeks after launch – and we’re aiming for higher.”

Bippit supports Mando Agency, like all clients, with an ongoing programme of engagement materials designed to keep the service in employees’ minds.

Aside from their staff survey, Mando also identified the need for financial wellbeing themselves by looking at different cohorts in the workforce and understanding their individual financial wellbeing needs, an approach that Bippit recommends.

“We have a number of juniors at the moment and one of them made a comment during a team dinner about running out of money before payday,” explains Deanne.

“And one of the older members of the team asked them if they budgeted, and they essentially said no because they’d never been taught. If you’re just out of university, you’re earning a living independently for the first time. There are things you literally just don’t know.”

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Getting buy-in for financial wellbeing from the Board

At Bippit, we increasingly find that a blended approach gets the best response from executive committees when it comes to financial wellbeing. Data isn’t enough alone and nor are personal stories. But they’re powerful when put together. It’s an approach Deanne believes in.

“We know the ROI of financial wellbeing from trusted organisations like Deloitte,” she says. “There are clear bottom line benefits. So the data side is easy to cover. As for the personal stories, I’ve been in HR 15 years and as a function we’ve made mistakes.”

“If somebody was off with mental illness, in the past you’d leave them alone. Now we know this is the wrong approach. It can be a very lonely place to be and that can have huge impacts.”

“It was really helpful to have Bippit’s pre-engagement materials. Even before the launch, we already had people trying to log on to the app.”

“By using real-life personal examples of where people are struggling, how they’re struggling and the personal and professional impact, you bring the data to life and show in a holistic way that prevention really does make a difference. It’s hard for an executive committee to argue with that.”

You must win hearts and minds to be effective

Deanne is an experienced wellbeing practitioner and sits on the British Interactive Media Association (BIMA) wellbeing council, so she gets a very broad view of the industry and the efforts being made to improve wellbeing.

“Some organisations will fund financial wellbeing initiatives, but the level of their support doesn’t reflect in the policies, processes, and support for individuals. They fund it because they are sold on the data and the impact on the bottom line. But engagement and adoption are long-term plays and for organisations to turn the dial, you need to win the hearts and minds of leadership. That’s when it really makes a difference.”

Focusing on adoption and engagement is really important. Organisations need to select the right financial wellbeing solution, one that empowers a diverse workforce to make better choices, but this is half the battle: then they need to focus on engaging staff with the solution. Deanne has experience in this area and some good advice. Firstly, she says, you must generate interest in advance.

“It was really helpful to have Bippit’s pre-engagement materials. Even before the launch, we already had people trying to log on to the app. Post-launch, you must keep talking about it in a variety of forums, for example monthly stand-ups or emails.”

“It’s most effective when employees talk to their colleagues about the value they’re getting from the service. Peer engagement is very important to adoption of financial wellbeing benefits.”

Culture, psychological safety, and engagement

Culture, Deanne says, is also critical. Mando Agency deeply appreciates that culture is important to making progress on employee wellbeing. Psychological safety and trust are key, particularly with regard to financial wellbeing – there’s a strong stigma in the UK when it comes to talking about money.

“We embedded that early with our senior leaders to share their stories. And people look at them and think, ‘no that couldn’t have happened to you as you’re successful and happy and confident.’ And that’s a realisation they go through. And for our team to know that everyone has been on their own journey, it really conveys hope.”

“We actually have an internal wellbeing committee, where people talk to staff about their own personal stories – and also offer themselves as a point of contact around some of the issues they’d faced in the past. That can be unbelievably powerful. But it must come from a place of wanting to talk and share. You need to dig in to find your champions.”

The right culture encourages sharing, which encourages signposting to wellbeing services – and keeps these services at the forefront of peoples’ minds. This is important to financial wellbeing. Because when people are thinking about money, they need to be thinking about what’s on offer in the workplace to support them. Bippit offers employees a comprehensive learning library so that whatever their financial need, they’re able to find relevant information and support.

What’s next for Mando?

Deanne’s focus on prevention is based on her long-term experiences in HR and a clear belief that this is the best strategy for sustainable employee wellbeing.

Next up is continuing their financial wellbeing journey, ensuring that all employees understand how personalised guidance, from Bippit’s team of expert coaches with FCA-recognised qualifications can empower them to make the best possible financial decisions at all stages of their lives.

They’re also trying out mindfulness, too.

“One of our team is actually a mindfulness instructor. And he’s doing some internal mindfulness courses. We’re all very excited about that. It should be great, and it’s part of a strategy of really opening up the conversation to talking about how we stay well, not how we deal with being unwell.

“It’s being proactive, not reactive. It’s prevention, not cure.”

And if you want to improve your team’s financial wellbeing, book a free Financial Wellbeing Lunch & Learn for your workplace.

Ready to explore how Bippit can

support your team?