Can I change my workplace pension provider? Learn your UK options, including transfers, personal pensions, fees and investments.
If you’ve looked at your workplace pension recently and aren’t particularly impressed by the fees, investment choices or performance, you might be wondering: can I change my workplace pension provider?
The answer is slightly more complicated than simply opening a new bank account.
In most cases, you cannot personally choose a different provider for the workplace pension that your employer currently pays into. Your employer chooses the workplace pension scheme it uses. However, you may have other options, including changing the investments within your existing pension, transferring an old pension, or opening a personal pension alongside your workplace scheme.
There are also circumstances where your employer may change pension providers and move employees to a new scheme.
This pension guide explains the main options and what to check before making any decisions.
Disclaimer: This article is for general information only and does not constitute financial advice. Pension decisions can have significant long-term financial and tax consequences. Consider speaking to a regulated financial adviser if you are unsure what is appropriate for your circumstances.
Who chooses your workplace pension provider?
A workplace pension is arranged by your employer. Employers are required to provide a workplace pension scheme and automatically enrol eligible employees.
Your employer therefore normally chooses the workplace pension provider, rather than each employee selecting their own.
For example, an employer might use one of the large UK pension providers and process employee and employer pension contributions through its payroll software.
When you’re enrolled, your employer must give you information explaining the pension scheme, including who runs it and how much you and your employer will contribute. You might receive this information electronically, by letter or as part of a pension welcome pack.
This arrangement is quite different from a personal pension, where you normally choose the pension company yourself.
Can I change my workplace pension provider myself?
Generally, no – not while expecting your employer to continue paying into that alternative pension.
If your employer uses a particular provider for its current workplace pension, you usually can’t simply tell payroll that you would prefer your contributions to go to a new pension provider instead.
The employer is responsible for selecting a qualifying pension arrangement and meeting its automatic-enrolment responsibilities.
However, that doesn’t necessarily mean you’re stuck with every aspect of your current scheme.
Depending on its scheme rules, you may be able to:
- change how your pension pot is invested;
- choose from different investment options or funds;
- increase your pension contributions;
- make additional retirement savings elsewhere;
- transfer pensions from previous employers into another pension;
- or, in some circumstances, transfer money out.
The exact options depend on the scheme and provider.
Can I ask my employer to use a different pension provider?
You can certainly ask.
For example, employees might raise concerns about high charges, limited investment options, poor administration or difficulty accessing information.
But the decision to replace the company’s workplace pension provider normally rests with the employer (and, depending on the type of scheme, potentially trustees or others responsible for it).
An employer can change provider. MoneyHelper notes that, with a defined contribution pension, potential changes can include an employer changing the pension provider.
If an employer closes a workplace pension scheme, it cannot simply leave eligible employees without one. GOV.UK says employers cannot close a workplace scheme without automatically enrolling members into another scheme.
So a company switching to one of the new pension scheme providers could result in you receiving a new workplace pension without requesting the change yourself.
What if I want better investment options?
Before trying to change provider, check what is available inside your existing pension fund.
Many defined contribution workplace pensions offer several funds rather than just the default investment.
Depending on the provider, you might find funds with different:
- risk levels;
- geographical exposure;
- asset allocations;
- approaches to responsible investing;
- retirement strategies;
- and charges.
Therefore, changing funds within your current provider could potentially be a much simpler solution than attempting a pension transfer.
Don’t assume a fund with impressive recent performance will necessarily provide better returns in future. Investment performance isn’t guaranteed, and the value of a pension can fall as well as rise.
Also check the charges associated with alternative funds.
Can I transfer my current workplace pension to another provider?
Possibly, but this is where things become more complicated.
Some workplace schemes may permit transfers while you’re still an active member, whereas others might not. The first step is therefore to contact your provider and check your scheme rules.
You also need to distinguish between transferring your entire pension and making a partial transfer.
If transferring your whole pension pot means leaving your employer’s workplace scheme, consider what happens to future employer contributions. Giving up employer pension contributions simply to move to a preferred provider could have a substantial potential impact on your retirement savings.
Before doing anything, ask your pension provider and employer exactly what would happen.
What about an old workplace pension?
This is much more straightforward.
When you leave an employer, your workplace pension doesn’t disappear. It remains yours. GOV.UK explains that if you stop contributing, the money can remain invested until you reach the scheme’s pension age.
You may subsequently be able to transfer that old pension to:
- the workplace pension at your new job;
- another pension you already hold;
- or a suitable personal pension with a different provider.
MoneyHelper confirms that people leaving an employer can generally leave their pension where it is or potentially transfer it to a new provider, including the provider used by a new employer.
If you’ve accumulated different pensions throughout your working lives, consolidation can look attractive because it gives you fewer accounts to manage.
But transferring isn’t automatically a good idea.
Should I combine pensions from different providers?
Having five pensions from different providers can certainly be inconvenient. You have five logins, five sets of statements and potentially five different investment strategies to monitor.
Moving them into one place can be a great way to simplify your finances and potentially give you greater visibility over your total retirement savings.
But convenience isn’t the only consideration.
Before transferring, compare:
Fees: Would the destination pension genuinely offer lower fees? Look at the overall cost rather than focusing on one headline charge.
Investment choices: Does the new provider offer investments that are a better fit for your objectives and attitude to risk?
Existing benefits: Some older pensions contain valuable guarantees or benefits that could disappear permanently after a transfer.
Exit charges: Check whether your old provider charges anything for leaving.
Investment strategy: Understand how your money is currently invested and how it would be invested after transferring.
Future contributions: If it is your active workplace pension, establish whether transferring affects future employer contributions.
MoneyHelper specifically recommends checking whether you would lose benefits before transferring and comparing factors such as investments and charges when considering different pension schemes.
A pension offering lower fees isn’t necessarily better if transferring means giving up valuable benefits.
A step-by-step guide to changing pension providers
If you’re considering moving an old defined contribution pension, this step-by-step guide provides a useful starting point.
Step 1: Find out what type of pension you have
Determine whether you have a defined contribution pension or a defined benefit pension scheme.
This is an important factor because the considerations can be very different.
A defined contribution pension essentially builds a pot based on contributions and investment performance. A defined benefit scheme typically promises retirement income calculated according to the scheme’s rules.
Step 2: Check your existing pension
Find your latest statement or log into your provider’s website.
Look at your:
- pension value;
- current investments;
- annual charges;
- transfer value;
- guarantees or special benefits;
- and transfer restrictions.
Don’t transfer purely because another provider’s website or app looks better.
Step 3: Compare your options
If you’re considering a new scheme, compare its fees, investment range, service and features against what you already have.
The cheapest pension won’t necessarily be the best pension for your circumstances.
Pensions are long-term investments, so relatively small differences in costs can matter over decades – but investment options, service and valuable existing benefits can matter too.
Step 4: Check what you would lose
This is particularly important with older pensions.
You could potentially lose guarantees, protected retirement ages or other valuable features by transferring.
If you’re considering transferring a defined benefit pension, the decision can be particularly complex and regulated advice may be required in certain circumstances.
Step 5: Check the new provider accepts transfers
Not every pension accepts every type of transfer.
If you’re consolidating an old workplace pension into your new workplace pension, ask the new provider whether transfers are accepted and whether any deadlines apply.
Step 6: Request the transfer
MoneyHelper says the receiving scheme will usually provide the transfer request and contact the existing provider to arrange for the money to be moved. It says transfers often take around two to six weeks, although providers can have longer to complete the process.
The best way to approach the process is carefully rather than rushing it. A little preparation can help create a smooth transition and reduce the likelihood of unpleasant surprises.
Could I use a personal pension instead?
You can potentially open a private pension alongside your workplace pension.
Personal pensions can be useful for people wanting additional investment choices or somewhere to consolidate suitable old pensions.
A stakeholder pension is another type of personal pension, although there are now many other personal pension products available.
GOV.UK notes that personal and stakeholder pensions can be used to save additional money for retirement or top up workplace pension savings.
This can also be relevant for self-employed people, who won’t normally have an employer making workplace pension contributions for them.
However, having a personal pension doesn’t automatically mean you should opt out of your employer’s pension.
Think carefully before opting out
Suppose your employer pays into your workplace pension, but you dislike the provider.
You might think the simplest solution is to opt out and pay the same amount into a personal pension of your choice.
The problem is that you could lose your employer’s contribution.
For automatic-enrolment defined contribution schemes, the statutory minimum total contribution is generally 8% of qualifying earnings, with at least 3% coming from the employer, although individual schemes can be more generous.
That employer contribution is valuable.
Your workplace pension could therefore still leave you with much money more towards retirement over the long term than saving your contribution alone elsewhere, depending on the contribution structure and investment performance.
Opting out purely because you prefer another provider should generally be considered only after understanding exactly what benefits you’d be giving up.
What happens when you start a new job?
Starting a new job will often mean joining another pension scheme.
Your existing pension remains yours, while your new employer can enrol you into its workplace pension if you’re eligible.
You could therefore end up with:
Employer A → Old pension
Employer B → New workplace pension
At that point, your next step could be to leave the old pension untouched or investigate transferring it.
There is no requirement to consolidate simply because you’ve changed jobs.
Sometimes leaving a pension where it is can make sense. In other circumstances, consolidating pensions could make administration easier or reduce charges.
Compare the details rather than assuming one approach is always better.
What happens if your employer changes provider?
Sometimes it isn’t the employee asking, can I change my workplace pension provider – it’s the employer deciding to change it for everyone.
Employers might review pension providers because of fees, employee experience, administration, investment choices or compatibility with their payroll systems.
If your employer changes scheme, you should receive information explaining what’s happening and how you’re affected. MoneyHelper says employees must be told about changes and that the scheme rules determine what changes are permitted.
Read any communications carefully.
Find out:
- whether existing pension savings will move;
- where future contributions will be paid;
- what the new investment options are;
- whether contribution levels are changing;
- what charges apply;
- and whether you need to take any action.
Don’t ignore letters or emails about a new pension scheme simply because your pension feels years away.
What about detrimental changes to a workplace pension?
If you’re worried about detrimental changes to your pension, start by checking the formal scheme documentation and speaking to your employer.
MoneyHelper explains that permitted changes depend on the scheme rules and that employees must be told how proposed changes affect them. It also says benefits already built up under existing rules won’t change unless the member agrees.
If you believe your employer isn’t meeting its pension obligations, further help may be available through The Pensions Regulator or The Pensions Ombudsman depending on the issue.
What happens to my pension during maternity leave?
Your pension deserves attention during maternity leave too.
During paid maternity leave, employee pension contributions are generally based on actual pay, while employer contributions are generally based on pay before maternity leave, including relevant pay increases. MoneyHelper says contributions will usually continue during paid family leave and explains that arrangements can change when leave becomes unpaid.
Check your scheme documentation and your employer’s maternity policy, particularly if you’re planning to take the full period of maternity leave.
It’s also worth checking your pension statement afterwards to make sure the expected contributions have reached your account.
Is transferring a defined benefit pension different?
Very much so.
A defined benefit pension scheme promises benefits according to a formula rather than simply giving you an investment pot.
Transferring one into a defined contribution arrangement can mean permanently giving up guaranteed retirement benefits.
The rules around these transfers are consequently much more stringent than moving an ordinary defined contribution pension.
If you’re considering this type of transfer, getting independent financial advice from an appropriately regulated adviser can be particularly important. In some circumstances, regulated financial advice is mandatory before a transfer can proceed.
Don’t treat a defined benefit transfer as if you’re simply moving money between bank accounts.
Are pension transfers similar to switching bank accounts?
Not really.
Switching the best bank account you can find or applying for a new credit card is fundamentally different from transferring decades of retirement savings.
A pension may contain guarantees and tax advantages that can’t simply be restored if you change your mind later.
Your pension investments may also spend some time out of the market during certain transfer processes, depending on how the transfer is carried out.
That’s why researching a pension transfer can initially feel like a daunting task.
The aim shouldn’t simply be to find a new provider. It should be to understand whether transferring actually improves your overall retirement arrangements.
Can I choose mutual funds for my workplace pension?
UK pensions generally describe their choices as pension funds or investment funds rather than using the US term mutual funds.
Your provider may offer funds investing in shares, bonds, property and other assets.
Some workplace schemes offer a relatively small selection, while others provide considerably more choice.
If you’re dissatisfied with the default fund, check what alternative investments your current provider offers before looking elsewhere.
How much difference can fees make?
Fees are easy to overlook because a difference of a fraction of a percentage point doesn’t sound substantial.
But pensions can remain invested for decades.
Consider two otherwise identical pensions where one costs considerably more each year. Over a long period, those additional charges can reduce the amount remaining invested and benefiting from compound growth.
However, fees should never be viewed in isolation.
A cheaper pension could have fewer investment choices or features. Equally, an expensive pension doesn’t guarantee superior performance.
Cost is one important factor among several.
Can I have both a workplace pension and a personal pension?
Yes.
You don’t generally have to choose between the two.
You could continue contributing to your employer’s workplace scheme – including receiving employer contributions where applicable – while separately saving into a personal pension.
Just remember that pension tax rules and annual allowances can apply across your pension contributions, so consider your overall position rather than looking at each account separately.
This arrangement can provide flexibility for people who want more control over additional retirement savings without giving up the benefits associated with their workplace scheme.
Questions to ask before changing pension provider
Before making a transfer, ask yourself:
- What am I actually trying to improve?
- How much am I currently paying in charges?
- What would the new pension cost?
- What investment options do I have now?
- What would the new provider offer?
- Am I giving up any guarantees or special benefits?
- Does my current pension charge an exit fee?
- Does the destination pension accept transfers?
- Would my employer continue making contributions?
- How would my pension be invested after the transfer?
- Am I comfortable making the decision myself, or would professional advice give me more peace of mind?
The answers can help you establish whether another pension genuinely looks like a better fit, rather than simply being different.
What should I do first?
If you’re unhappy with your current workplace pension, the first step is usually to find out exactly what you already have.
Log into your pension account or find your latest statement and establish:
- what type of pension it is;
- how much is currently in it;
- what you’re paying in fees;
- where the money is invested;
- what alternative funds are available;
- what your employer contributes;
- whether transfers are permitted;
- and whether you’d lose any benefits by moving.
Then compare those facts with your alternatives.
Your pension could eventually become one of your largest financial assets. Giving the decision proper attention now can potentially make your retirement planning much easier later.
So, can I change my workplace pension provider?
If you’re still employed and paying into your employer’s active workplace scheme, you usually can’t personally replace the provider chosen by your employer and expect your employer to redirect its normal workplace contributions to your preferred pension.
But you may have other choices.
You might be able to select different funds within your existing scheme, save additionally through a personal pension, transfer suitable pensions from previous employers, or consolidate old pensions with a new provider.
Your employer may also decide to move employees to a different workplace pension scheme.
So when asking can I change my workplace pension provider, the most important distinction is whether you’re talking about your current workplace pension or an old pension from a previous employer.
For an active workplace scheme, your options are usually determined by your employer and the scheme rules. For old defined contribution pensions, you generally have considerably more freedom to investigate different providers and pension transfers.
Before transferring anything, compare fees, investment choices, guarantees, benefits and restrictions. If valuable benefits are involved or you’re uncertain about the consequences, regulated financial advice can help you understand your options before making an irreversible decision.
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