Freezing Your Pension Fund

If you choose to leave your occupational pension scheme, but you do not want to have your contributions refunded, see Contribution Refund, nor transfer your pension fund into another pension scheme, see Pension Transfer, you may decide to leave your pension fund where it is, in your existing pension scheme, although you will no longer be a pension scheme member. This is known as freezing or preserving your pension, and is also referred to as preserving your pension rights; "pension rights" indicates those rights you have built up to receive a certain fund of money, or a certain annual pension, on retirement. Your pension scheme must give you the option of freezing your pension if you have been a scheme member for longer than two years; if you have been a scheme member for less than two years your pension scheme may still offer you a frozen pension, depending on the scheme rules and regulations.

You can also freeze your pension fund if you are making contributions to a scheme and are allowed to stop making these contributions for a period of time, perhaps because your financial situation no longer allows you to save money for retirement. The pension fund in the scheme will remain as it is, frozen or preserved, until you retire and wish to claim it. Naturally, freezing your pension and/or ceasing to make contributions will mean that your pension fund does not continue to grow as it would have done, had you remained a member or continued to invest; therefore the pension fund or benefits you are entitled to receive on retirement will be worth less than you initially calculated when you joined the scheme.

For further details on freezing your individual pension see Defined Benefit Scheme Preserved Pension and Defined Contribution Scheme Preserved Pension.