Find out what happens if your pension scheme is closing, including how long it takes and the options you’re likely to have. 

You’ll be told when your pension scheme will end

Your pension scheme might close if your employer: 

• wants to change the pension scheme they offer 
• can’t afford to keep it running, or 
• goes out of business. 

The amount of notice you’ll get depends on your scheme’s rules, but your pension provider will contact you with a deadline for final contributions. This is typically called the wind-up date.  

You’ll usually receive this by post or email, so check your pension provider(s) have your correct contact details. If you’re already receiving your pension, nothing will change until the pension scheme is fully closed and you’re told your options.  

It can take up to two years for a pension scheme to close

Closing a pension scheme is a complex process. It can often take up to two years as your pension provider needs to:

• work out if there’s enough money in the scheme to pay everyone, and
• identify and contact all the members of the scheme.

They’ll send you an update at least once a year until you’re given the options for your money. 

Your options when your pension scheme closes

Before your pension scheme is ready to be fully closed, the trustees will send you information on your options.

If your defined benefit (final salary) pension is closing

You’ll usually continue to get the retirement income your defined benefit pension promised, but an insurance company will manage these payments instead of the original pension provider.

If there’s not enough money in the scheme to do this, your pension might be transferred to the Pension Protection Fund. This means you’ll get 90% or 100% of your promised pension in the form of compensation payments. If you haven’t taken any money from your pension, you could also choose to transfer your pension to a new provider.

If your defined contribution pension is closing

If you have a defined contribution pension, you can usually choose to transfer it to another scheme, including to:

• a new pension provider or scheme your employer has arranged 
• an existing pension scheme you have elsewhere
• a pension scheme you set up yourself, or 
• an insurance company who will run it for you (called a buyout policy).

See MoneyHelper's guides for more information: 

• Transferring your defined contribution pension
• Self-invested personal pensions (SIPPs) 

If you have under £18,000 in a pension scheme that’s closing

If the total value of your pension benefits is under £18,000, you might be able to take it all as cash. This is called a ‘winding-up’ lump sum. You can usually take up to 25% tax-free if you haven’t touched the pension yet. You’ll pay Income Tax on the rest (or all of it if you’ve already taken money from the pension).  

If you’ve recently joined a pension scheme that’s closing

You might be able to get a refund of the money you’ve paid into a pension if it closes within: 

• 30 days of you joining a defined contribution scheme, or 
• two years of you joining a defined benefit scheme.