You can hardly have failed to notice that the prediction for UK pensions is not good. Like many European countries, the UK has an aging population and a decreasing birth rate. Whilst the workers are currently funding the old aged pensioners, it remains unclear how the next generation of old aged pensioners will be funded. Simply put, we are getting older and the pension scheme currently in place is not able to accommodate this.

As societys attitude towards work has also undergone a major transformation whereby a job for life no longer seems to be the norm, the number of employees with a frozen company pension scheme is also on the increase. In fact, many people are changing their job so often that they have accumulated a number of frozen company pensions. So, what are the options available for those with a frozen company pension?

Pension plans can become frozen if you have been part of a company pension plan and you then decide to leave the company. Normally this happens when you have been working for the company for two years. This pension plan is known as a frozen company pension as you are unable to then pay any contributions into it. If you have a frozen company pension you will not be able to simply draw money out of it as the money will have be paid before tax. This means that the Inland Revenue have strict regulations as to how to deal with a frozen company pension. Although this may seem as though it is fairly final you will still have a few options available to you. These frozen company pensions options can be summarised as follows:

Transferral - Transfer the frozen company pension to another company pension scheme. Allowing you to then make new contributions
Acceptance Leave the frozen company pension with your previous employer and accept that you will not be able to pay into it again
Conversion Convert the frozen company pension over to a Personal Pension Plan, allowing you to start making contributions again
Buy Out Transfer the frozen company pension to a Section 32 Buy Out Policy

It is always advisable to discuss these four options in more detail with a financial adviser to ensure that you are fully-informed about your future possibilities for your frozen company pension. By having a full understanding of the implications of freezing plans and investment approaches when evaluating the requirements of a frozen company pension plan, you can rest assured that you will be making the best decision for your retirement.