What is a frozen pension and what are my frozen pension options?

A frozen pension is an old workplace pension that you are no longer paying into. If you’ve changed jobs a few times, and haven’t thought about combining your pensions, it’s likely you’ll have a few frozen pensions. Some of these inactive pensions could be subject to hefty fees, so it might be wise to track them down.

With 2017 research finding that up to a fifth of British adults have lost track of multiple frozen pensions, it’s more important than ever to keep track of your savings. Not only will you get peace of mind that you’ve saved enough for a comfortable retirement, you’ll also have sight of how your savings are performing and what fees you’re being charged.

With a little investigation and clever planning, there are several things you can do to get your frozen pensions back on track.

Track down frozen pensions

The first thing you’ll need to do is track down all of your old workplace pensions. If you don’t have all the information saved, there are several ways you can locate the details of your old pension providers.

If you contact your former workplace, the HR department should be able to provide you with details of the company plan. It will then be up to you to contact the provider directly to find out the value of your pension.

If you have several frozen pensions, it may save time to use the government’s free Pension Tracing Service to locate them. This is a searchable database that allows you to input your former employer’s name or pension provider to find the information you require. You can use this service online or by telephone.

Frozen pension options

When you’ve located a frozen pension, there are several things you can do with it.

  • Transfer your pension: if you have several frozen pensions, you may choose to combine your pots and transfer them all into your current pension.

  • Create a new pension: personal pensions are independent from workplace pensions and anyone can set one up. With a personal pension, you’ll get to choose your pension provider and the scheme that’s best suited to your needs.

  • Purchase an annuity: buying an annuity will help you secure a guaranteed income for a fixed period, whether that’s a few years or the rest of your life. You can purchase an annuity from the age of 55.

  • Drawdown: drawdown is the main alternative to purchasing an annuity and enables you to keep your pension invested until you need it. You need to be aged 55 or over to begin using drawdown.

Beware of hidden charges on frozen pensions

Once you have sight of your frozen pensions you should check their value and examine your statements carefully.

It’s not uncommon to think that while your pension is frozen it will be ticking over and growing, but this isn’t always the case.

Every provider imposes pension charges of some description, and these can have an impact on your savings. These may include an annual management fee (which covers your provider’s admin costs) and exit fees (which are triggered the moment you withdraw or transfer your pension).

Other fees can also be charged on frozen pensions which, over time, can chip away at your savings.

By its very nature a frozen pension is inactive, yet some providers will charge an inactivity fee. This means that if you fail to make contributions over a set period of time you can be penalised.

Service fees, policy fees and underlying fund fees may also be charged. So it’s well worth learning about the range of pension charges you could be paying and checking your plan’s small print.

At PensionBee, we only charge one annual management fee. And there’s no exit fee if you leave PensionBee at any point.

There’s also a 30-day cancellation policy, which means we’ll return your pensions to your old providers (if they’re willing to take them back) free of charge if you cancel your PensionBee plan within 30 days of opening it.

Combine your pensions with PensionBee

Once you’ve located all of your frozen pensions it can be a good idea to unite them in one single pot. Combining can be one of the best ways to keep track of all your pensions and reduce the amount of fees you pay.

PensionBee can help you combine and transfer all of your frozen pensions into one simple online plan. This will make it easier to manage your pension and help you track the income you can expect to receive in retirement. Plus, with PensionBee you’ll only be charged a single annual fee.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Last edited: 06-04-2024

Lost track of your old pensions?

Sign up to PensionBee and we’ll combine your old pensions into a new plan that you can manage online.

Get started now

Mobile PensionBee analytics chart
Mobile PensionBee analytics chart
Apple Store logo Google Store logo

Have a question?Call our UK team020 3457 8444

Monday-Friday: 9:30am-5pm