Should I Move A Frozen Pension?

Should I move a frozen pension is a question we are often asked.The answer depends on many issues including your personal circumstances, how the fund has performed, what the charges are and your attitude towards risk. There is no simple answer but in this article, we have tried to cover the information you need to collect and the key points to check.

Initially grab your last annual pension statement. Statements from the previous three or four years might also help. You will also need the terms and conditions of your frozen pension scheme.

If you have lost track of your pension there are various free tracing services available that should provide details of the pension administrators. Armed with this information you can request copies of any missing information.

This article covers defined contribution personal and workplace based pension schemes only. It does not cover final salary (defined benefit) pensions.

What is a Frozen Pension?

Generally a pension is called “Frozen” when it (the pension) no longer receives contributions. In practise pensions are rarely “Frozen” if the scheme is a defined contribution or money purchase plan the fund that you are invested in should continue to grow over time.

If the pension is a  Final Salary or Defined Benefit scheme the deferred pension is likely to increase each year in line with some measure of inflation (each scheme is different)

Pension Fund Growth

The first issue to check is the growth of your frozen pension fund over time. Has your pension been growing roughly in line with industry averages? The fund that you are invested in should be shown on your statement and you can easily check how it has performed against the industry average. Looking back over previous statements will also give you some idea if your original fund has been switched by your pension provider to a similar fund.

Examples of average returns across all sectors can be found here

Remember there may be valid reasons your pension policy performs worse than average in any particular year. However, if its performance is consistently below average that should give cause for concern.

Frozen Pension Scheme Fees and Charges

Over an extended period of time pension fees can erode the value of a pension fund significantly. Some charges are inevitable but if they are high (2.5% to 5% of the fund value each year) it may be worth considering taking action.

Be careful to read the annual pension statement and pension documentation carefully. Most providers are open and transparent about the level of fees but some (especially older pension policies) are not. Various elements make up the total fee. It is important to check you have the total fee not just one or more parts of the total. Also, watch out for any pension exit fees.

Protected Benefits

If considering moving a “Frozen” pension from an existing provider it is important to check you will not be giving up valuable benefits. The pension scheme may offer an early retirement date, more than 25% entitlement to tax free cash or a protected annuity rate that may be better than the rates available today. There may be various benefits that you may not want to give up by moving to another provider.

Retirement Planning Exercise

You may have several “Frozen” pensions along with schemes that you are currently contributing to such as workplace pensions or personal pensions. You may have ISA’s or other assets. It is important not to consider a single investment or pension in isolation even if it is a “frozen pension”. Consolidating several frozen pensions is sometimes worth consideration depending on the circumstances.

Things to consider:

  • Your state pension entitlement.
  • Your total pension fund.
  • Your expected financial position during retirement.
  • Your pension choices (annuity and drawdown).
  • Your beneficiaries and your tax position.

It may be a “Frozen” pension is performing well. It may be it offers valuable protected benefits. Or your personal circumstances may dictate it is best left where it is but it is important to check. Failure to take action if there is a problem can have a major impact on your retirement funds.

Download our free guide to learn more. Or, if you have a question simply give us a call on 0800 043 8341 and we will be happy to help. If you prefer, use the Chat Box or request a call back. You may also Email us and one of our friendly team will get back to you.


This blog is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investment or course of action. The past is not a guide to future performance. The value of investments can go down as well as up and you may not get back the full amount you invested. Tax and financial regulations can change. Any figures quoted above are correct at the date of publication.

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