I am an office worker in my mid-30s and have built up a private pension pot after being auto-enrolled totalling roughly £75,000 over my decade long career.

I have been offered a new role, which I’m likely to accept, but one thing holding me back is the thought I will miss out on building that pot and the compounding interest on it.

I’m confused by my options. What options do I have? Can the money be transferred to the new job, and can it continue my contributions or is it dependent on the pension provider? Does it matter if my new job is with the same pension provider?

Retirement planning: Can I move my private pension with me if I leave my job?

Retirement Planning: Is it possible to take my private pension along with me when I retire?

It is important to know if you start completely from scratch. I fear it does as a compound interest calculator, assuming 5 per cent growth, shows that if I continue paying in at the same level but on a £75,000 pot it will mean far more interest on my interest.

This is a very difficult situation. I would love to have a passport-based pension system.

Tanya Jefferies from This is Money responds:People who change jobs often face this dilemma. They eventually accumulate a great deal of pension money over their lifetime.

It is important to note that not all pots will be merged automatically. However, there are many good reasons why you might want to keep your pensions separate.

Therefore, you will need to decide on each case-by-case basis. Below, we asked an expert in workplace pensions to explain what you need to consider.

Michael Ambery:  The decision on whether to consolidate pensions is still an individual and personal one

Michael Ambery:  The decision on whether to consolidate pensions is still an individual and personal one

Michael Ambery (partner at Hymans-Robson pension consultancy) replies: As most people, you’ll have enrolled or joined the pension system of your former employer when you first started your new job.

You will build up your pension fund over the years. When you leave, you have the option to keep it there or invest it.

You can also transfer your pot to another retirement arrangement. Most likely, your new employer’s scheme for pensions. Once you begin your new position, you will need to pay into it.

How can you make a decision about whether to remove your pot from its current location?

Is your existing pension account invested in the right place?

Is the investment risky? Do you have any personal convictions, like sustainability or faith?

How much are your investment fees?

– Does the pot have any ‘penalties’ for transferring to another pension arrangement?

Is there any value to the pension? Or is it at a younger age than normal when you can start taking your benefits. If you move it would it be worth it to you to have it replaced.

It is important to compare your pension plan’s charges, investment options and penalties with the new one.

Concerning returns on investment, your pension will be invested if it remains where it is.

It was a question about whether moving your pension will be more difficult if the new employer uses the same pension provider or if it won’t.

Answer: Although you might be with the same provider as before, it is possible that your investment options and fees and other factors such as retirement date and your age may vary.

You should consider all of the above factors when deciding whether you want to move your money and how it will affect your retirement.

How about compounding your investment returns?

Financial planning and advice

Your investment pot is determined by how much you (or your employer) contribute to it. Also, the performance of the investments.

Investment returns and year on year contributions have an impact on the size of the pot. If a pot grows by 10% in one year, then the investment returns for the next year on a bigger pot will have a greater impact.

When compounding is done in a positive way, it can result in more income over the years. This is a kind of exponential growth in your fund.

If pension pots have a small size and are split, then there is no way to expect the compounding effect of making money each year.

A smaller amount of money can lead to more loss from the charges that are being imposed on it.

A second consideration is that different investment risks may be perceived by individuals who have multiple pots.

You ask does it matter if you already have a £75k pot and start a new pension from scratch now.

A £75k pot is a significant amount of pension savings. Consolidating is a decision that must be made by each individual.

This decision should be made with consideration to your investment risk and charges, as well as how you plan to use the pension fund.

Are pension pot passports possible?

A pension fund that follows you while you are changing jobs has been a topic of discussion for years in the industry.

At the current time there isn’t an automatic process as it is a personal decision and people need to consider charges, investment choices, performance and risk first, as explained above.

There are several firms which act as pension ‘consolidators’, and will assist people on the journey to move benefits from one arrangement to another.

Is there anything else you should think about?

These are some additional tips to keep in mind.

Maintain a current view of your pension just as you do your bank account or your current account. You should check where your pension is investing and what its performance is on a daily basis, at most once a year.

Do you need to merge your pension pots with other ones? 

While managing only one can be more straightforward, it could mean you lose some valuable perks. This is Money Guide available here.

– Don’t lose contact with your old pension providers, and keep your address details and beneficiaries up to date.

– Make sure you regularly check the charges that are being applied to your invested pot – the small details are important.

You can check the details about your pension provided by the provider or trustee. It is likely that there will be a web or mobile app with information, guidance, tools, and resources to help explain your options, guide you about investment, fund ranges, costs, and consider transferring or taking benefits.

Consider your options when you move to a new job. Find out what the pension system is like, how it works, the benefits and the contributions that you have to them. As described above, compare your new pension arrangement to your existing one.

Maximising your benefits and contributions from your employer is a good idea to save as much as possible.

You should consider investing your pension in stocks or shares if you’re in your 30s. A typical goal for pension funds that have been invested in growth assets is to achieve a return of 5% or more annually.

TOP TIPS FOR DIY Pension Investors

Affiliate links may appear in some of the links. We may receive a commission if you click them. This is money helps fund it and we keep it for free. Articles are not written to sell products. Our editorial independence is not affected by any commercial relationships.