When you start a new job, your workplace pension is one of the most valuable benefits you’ll get and one of the most ignored.
Most people leave everything on the default settings, assume it is “sorted”, and don’t look at it again for years.
That usually means:
- missing out on employer contributions
- paying more tax than necessary
- ending up with multiple pensions they do not really understand
None of this is difficult to fix, but it does require a few checks early on.
This is a simple checklist to help you make sure your workplace pension is set up properly from the start.
Everyone loves a bullet point list, so here it is, more detailed explanations of each item are further down the page.
The Checklist
Activate Your Online Portal
If you do nothing else, do this. It is your only real visibility of what is going on.
Almost every workplace pension now comes with an online portal or app, and this is your starting point.
It gives you visibility of your pension value, contributions, and investment choices. It also means you can keep track of things without relying on paperwork or HR.
If you don’t activate it early, it often gets forgotten and then becomes harder to access years later when you actually need it.
Update your contact details to personal ones
Do not leave pensions tied to old work emails. This is one of the most common admin problems we see.
It sounds simple, but this is one of the most common admin mistakes we see.
If your workplace pension is linked to your work email and you leave the company, you can lose access or miss important updates.
Switch everything to a personal email and phone number straight away.
While you are at it, it is worth checking any older pensions from previous jobs and updating those too while you still remember your login details.
Check your contribution level and employer match
Check you are getting the full employer match If you are not, you are effectively turning down part of your pay.
Your workplace pension is one of the few areas where you can get an immediate return on your money through employer contributions.
Many employers will match what you pay in up to a certain level, but the default setting does not always take full advantage of this.
Check what the maximum match is and make sure you are contributing enough to receive it. Otherwise, you are effectively leaving part of your pay behind.
Understand how contributions are calculated
Understand how your contributions are calculated - Qualifying earnings, basic pay or total earnings can make a big difference. If you have a choice, pick the one that gets the most from your employer.
Not all workplace pension contributions are worked out the same way.
Some are based on qualifying earnings, some on basic pay and some on total earnings.
This can make a noticeable difference to how much goes into your pension over time.
If you have a choice, it is usually worth selecting the option that results in higher overall contributions, especially where the employer contribution increases alongside it.
Check if salary sacrifice is available
Salary Sacrifice (also known as Salary Exchange) his can reduce tax and National Insurance and increase what goes into your pension. For many people, it is one of the simplest wins.
Salary sacrifice can be one of the most efficient ways to contribute to a workplace pension.
It reduces your taxable pay, which means you save on both income tax and National Insurance.
In many cases, employers also pass on their own National Insurance savings into your pension.
It is not right for everyone, particularly if your earnings are low or close to certain thresholds, but for many people, it is a straightforward way to boost contributions.
Understand how tax relief is applied
If your workplace pension uses relief at source and you are a higher rate taxpayer, you may need to claim extra tax relief yourself. Many people miss this.
Workplace pensions use different methods to apply tax relief, usually either relief at source or net pay.
If your scheme is relief at source and you pay more than basic rate tax, you will need to claim the additional tax relief yourself through your tax return or by contacting HMRC.
This is often missed, which means people end up paying more tax than they need to. It is worth checking how your work pension operates so you do not lose out.
Review the default investment fund
Default does not mean best for you, it's best for the average employee... make sure you understand it.
Workplace pensions will place you into a default investment fund, but have alternative options. However, it is not guaranteed to be the best fit for your circumstances. You should consider the level of risk, the investment approach, and whether it uses a life-styling strategy as you approach retirement. A quick review at the start can help make sure your pension is aligned with your goals rather than just relying on the default setting.
If your pension plan is ‘lifestyled’ and because of a quirk in the workplace pension regulations, it probably is, it means that as you approach the date set as your planned retirement date, the investments are automatically ‘de-risked’. This generally means moving the percentage of equities is reduced and fixed interest assets increased to make it less volatile, but as risk and reward are linked, this might not be what you want – especially if you plan on going in to drawdown at retirement and staying invested for the rest of your life, essentially. You can usually opt out of this by selecting your own fund. But make sure you understand the fund you are choosing; a financial adviser can help if you’re not sure.
If your plan is not life styled does the volatility or risk profile make sense for your timeline, and needs. A 20 year-old has the time to wait for a volatile investment to recover a 55 year old may not, so the profile of the default fund matters.
Many pension providers have signed up for the Mansion House accords that will see a percentage of default funds moved into highly speculative asset classes; is this what you want? Selecting your own fund avoids this.
Consider whether a pension transfer makes sense
If you have pensions from previous jobs, it is natural to think about combining them into your new workplace pension. Sometimes it makes sense but sometimes it doesn't.
If you have pensions from previous jobs, it is natural to think about combining them into your current workplace pension.
In some cases, this can make things easier. Having everything in one place can simplify admin, make it easier to track performance, and reduce the chances of losing old pensions over time.
However, a pension transfer is not always the right move.
Older pensions can sometimes include valuable features that are not available on modern workplace schemes. These might include guarantees, protected benefits, or lower charges. Transferring out of those arrangements could mean giving something up that cannot be replaced.
It is also worth checking whether your new workplace pension is actually better. Lower costs, better investment options, and flexibility all matter, and they are not the same across every scheme.
This is one of the few areas where a wrong decision is often difficult to undo, so it is worth taking a bit of time to understand what you have before making any changes.
If you are unsure, the key thing is not to rush. “Simpler” is not always better when it comes to pensions.
If you need advice on this it is something we can help with – just schedule an initial free chat.
Set up your expression of wishes
This decides who receives your pension if you die. It is separate from your will and often overlooked.
Your workplace pension will usually ask you to complete an expression of wishes form. This tells the provider who you would like to receive any pension benefits if you die.
It is separate from your will and also separate from any death in service benefit provided by your employer. I
f you do not complete it, the provider will decide who receives the money, which may not match your intentions.
It only takes a few minutes to set up and can be updated at any time. It’s usually available in your portal.
Think about how your pension fits into your wider planning
If you have pensions from previous jobs, it is natural to think about combining them into your new workplace pension. Sometimes it makes sense but sometimes it doesn't.
A workplace pension is not something you set once and forget.
A few small decisions at the start, how much you contribute, how tax relief is applied, whether you keep or combine old pensions, can make a meaningful difference over time.
Most of these checks only take a few minutes, but they are often put off for years.
Workplace pensions also do not exist in isolation. Decisions around contributions, tax and pension structure usually make more sense when looked at alongside the rest of your finances rather than on their own.
If you want to look at things properly, this is typically where a wider financial plan becomes useful, so you can see how your pension fits into the bigger picture rather than guessing at individual pieces.
If you would like to book an initial free chat about your financial planning – just schedule here.
