It is not possible to know if your circumstances will stay the same as when you began your pension pot throughout your life, especially in terms of employment and your financial situation. If your circumstances do change, it is vital that you know the steps that you need to take and what you need to do to ensure that your retirement and your retirement fund is still protected when you reach your retirement age. This article will take you through some of the most common circumstance changes that people face and what to do when these happen.
1. Being Made Redundant
When you are made redundant, you should talk to your past employer as soon as possible about what is going to happen to your pension.
- You should ask your employer whether they can put your redundancy fund into your retirement fund for you in replacement of an employer contribution. This will ensure that, regardless of your financial situation in the future, your retirement will run smoothly.
- You should then decide whether you want to keep your funds where they are or if you wish to move them to a different private or workplace fund. If you are looking for a private scheme, you should aim to get quotes from an assortment of varying pension companies to find the right plan for you.
- You may also split your redundancy pay into two, with some saved in your retirement fund so that you can support both your present situation and your future at the same time.
2. Becoming Bankrupt
If you become bankrupt, you must take immediate action to save the future of your income and retirement.
- The first thing that you should do is to speak to a trusted financial advisory service who can advise you on the next steps to take in terms of your pension according to your individual circumstances.
- You should then decide on the next steps, dependent on when you become bankrupt. If you were bankrupt after May 29th, 2000, you should speak to your trustee about paying over your pension for a designated period. However, your trustee can also prove that you have made an unusual or excessive pension payment to avoid creditors, and they can recover this money in court. In these cases, you should speak to a professional for advice.
- The next steps differ if you have gone bankrupt after May 29th, In these extreme cases, you will not be able to recover your pension, and they will all be given to your Trustee to pay off your debts.
3. Reducing Your Hours
If you are looking to reduce your hours, you should speak to your employer as soon as possible about the effect on your pension.
- You should make sure that you do not opt out of your workplace pension scheme as you will still be applicable for this even with reduced hours. You should ask to see the terms and conditions of this.
- You should also make voluntary payments whenever you can to ensure that your pension grows at the rate that you have always wanted it to.