I've got a new job and will be joining the pension scheme - what do I need to ask and do with my old pensions?

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I am moving jobs and will be joining a new pension scheme. What should I do about my older pensions, and what are the most important things to find out about the new one?

Changing jobs: Find out how open-handed or otherwise your new pension scheme is early on

Tanya Jefferies, of This is Money, replies: The thrill of receiving a new job offer often distracts people from sober consideration of the pension and other benefits that come attached.

It's not uncommon that the first thought someone gives to their new pension scheme is when the bumf about it arrives in the welcome pack. But it's better to ask about the details when you first receive the offer, and weigh them up before you accept the position.

The pension might not tip the balance against taking a job, but it's advisable to find out how open-handed or otherwise the new scheme is early on - especially if you have already built up some decent pots elsewhere, and if you are close to retirement.

And it might make a difference, if you are lucky enough to be in a final salary scheme at a current job, and in line for a guaranteed and relatively generous income in retirement, while the new pension is a stingier 'defined contribution' plan.

You should also give careful consideration to whether it's worth merging some or all of your older pension pots with your new one. Read more here about doing this. This is Money's Agony Uncle Steve Webb has tackled the topic here. 

Richard Parkin: 'Changing jobs is an exciting but stressful experience and people often don’t think about pensions but it’s important to do so'

It's important to look into whether you are being charged much higher fees on your older pensions. Charges have fallen since the Government put a 0.75 per cent cap on the amount levied on default pension funds under its auto-enrolment initiative, as this has helped knock them down on other schemes too.

Fees could amount to 3 per cent in the past, whereas you could be paying just 0.3-0.4 per cent now if your default work fund is a tracker, which clones the performance of stock markets rather than tries to beat them.

Even what sounds like a small difference in charges can have a major impact on a pension pot by the time someone retires, with an average earner building savings of £30,000 benefiting by £1,600 in a scheme levying 0.75 per cent compared with one asking for 1.5 per cent.

You should think about the potential investment performance of a fund as well as its fees if you are considering a transfer, or switching out of a default fund into any of the others offered by your scheme. Read more here about how to tell if a work pension fund is any good. 

We asked a pensions expert for more details on what to do when you are changing jobs and joining a new scheme.

Richard Parkin, head of pensions policy at Fidelity International, replies: First of all, congratulations. Changing jobs is an exciting but stressful experience and people often don’t think about pensions but it’s important to do so.

Hopefully you compared the pension benefits on offer in your new role to what you have in your current job. There are a few things to look out for here:

• What type of pension is it? Few employers still offer final salary schemes to new employees but you may be leaving one behind. These schemes are particularly valuable because they guarantee a level of pension at retirement that is often expensive to replace. More likely, the new pension plan will be a defined contribution plan. You and your employer contribute to the plan, the contributions are invested and you can take the proceeds as a mixture of cash and income any time after age 55.

• How much is your employer contributing? This is really important. Some employers may only contribute a little – currently the minimum they have to pay is roughly 1% of your salary. Many will contribute significantly more. You should really think of this as part of your pay. You might have got a salary increase on changing jobs but if your new employer is paying less in pension contributions than your current employer you may not be as well off as you thought.

• What contributions do you need to make? Most workplace pensions require you to contribute something. You shouldn’t really think of this as a hardship because the money is being saved for your future but it will impact how much you get in your pay packet each month. You may find that salary rise you got doesn’t all end up in your pocket.

• Will your employer pay extra if you do? It’s increasingly common for employers to match any extra contributions you pay. If you can afford to pay more then you generally should because this is, in effect, free money.

• What are the other benefits? One to watch out for here is life insurance. Some employers will have death benefits such as a lump sum or a pension for your spouse as an extra benefit to the pension scheme. Others may just pay what you’ve got saved in the pension scheme on your death in employment. Life insurance benefits are not as costly as you might think but you’ll want to make sure you’re family are covered should the worst happen.

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On starting your new job you should be automatically enrolled into the pension scheme so you don’t have to do anything. You should consider saving a bit more than the standard rate especially if your employer matches these contributions.

If you have got a higher salary maybe it will be easier to save a bit more. After all you don’t miss what you never had.

Your contributions will be invested in the default investment fund. This is generally designed to meet the needs of most people saving for retirement. If you do have some experience with investments you can pick some different funds from the range offered.

Finally, you should make sure you tell the plan manager what to do with any benefits payable on your death. You do this by completing an expression of wish form. Make sure you keep this up to date as your circumstances change.

In most cases you will be able to transfer the money in your old employer’s pension plan to the new one. If it was a defined contribution scheme this is relatively easy and you should be able to get a transfer form from your new pension plan manager.

Many people like to have their pensions in one place but do make sure that you’re not paying higher charges in the new plan and that you’re not going to pay a penalty or lose a potentially valuable guaranteed annuity rate on your eventual retirement income if you transfer.

If you’re unsure you may be best getting some help. You can call The Pension Advisory Service. It’s free and impartial so is a good place to start.

If your old employer’s plan was a final salary plan then you should think very carefully before transferring. If the transfer value of your old pension is more than £30,000 you have to take financial advice by law.

Even if it’s less, it may make sense to get some expert help. More often than not the value that is transferred cannot be guaranteed to give you the same level of income that you’d be giving up.