What can you actually do with your workplace pension? 7 things to check today

Most of us have a pension from work, thanks to auto-enrolment – yet plenty of us have no idea what's in it, what it costs, or where it's invested. Boring Money's founder Holly Mackay walks through seven simple checks, from tracking down old pots to squeezing more out of your employer's contribution, so your workplace pension is actually working for you.

Auto-enrolment was a policy introduced in October 2012 by Sir Steve Webb, former pensions minister in the Conservative/Lib Dem coalition government. It mandated employers to pay a pension to most people, even if they are one-man bands hiring a nanny, or a small start-up with 5 staff on payroll. No matter how small, the law says that employers need to pay most workers a pension.

Today’s rules say that 3% of your salary comes from your employer, and 5% from you. No one can force us to do this, and opting out is your right. But if you opt out, you kiss goodbye to that 3% from your employer, so it’s to be avoided if at all possible.

These sums of money are adding up. Have a look in your pension from work – you might be pleasantly surprised. But at the same time, you might then start to worry about whether that money is in the right home. So here are some pointers on what to look for.

1. Where is your workplace pension actually held?

The quickest way is your payslip. If you're working right now, the odds are you've got a pension from your employer – it's the law, so it almost certainly exists. You just need to know who runs it. Your payslip will usually name the provider; if it's not obvious, ask HR or your manager. Then write it down. You can't check the balance, the fees or anything else until you know who makes your pension and where to log in. It sounds obvious, but you can't do anything with a pension you can't find.

2. How much money is in it?

Once you know who runs it, work out how to log in and look at the balance. This is the nice bit: a lot of people are pleasantly surprised, because it's both you and your employer paying in, and those sums add up more than you'd think. Most providers have an app, so it's about a two-minute job once you're logged in. You might have more in there than you expected, or you might look and think ‘hmm, that's a bit thin’ and decide to dig further. Either way, you should know your number.

3. How much am I paying in pension fees?

Look on your annual statement or call up your pension firm, and ask for the total, all-inclusive fee you're paying – to include investments, admin and the kitchen sink. As a rough ballpark, I'd expect somewhere around 0.3% to 0.7% of your balance a year, which works out at roughly £3 to £70 a year for every £1,000 you hold. Any more, and I'd want to know why. Any less, and I'd ask what they're not telling you!

Interestingly, a pension through work often costs you less than one you set up yourself in a private capacity online. Some of the snappier retail apps you keep seeing advertised can cost a fair bit more- nicer app, but the bigger fees will eat into your eventual lump sum, so just check you're not paying above the odds.

4. Where is my workplace pension invested?

Your pension is put to work in the stock market

on your behalf, to give it the best chance of growth. When you're auto-enrolled you get placed in what's called a ‘default fund’ – the mix of investments your provider thinks is right for you. That's usually fine, but it's worth a look.

The main question is whether it's taking enough risk for your age. It'll almost inevitably be a mix of cash-like things and shares

, and the younger you are, the more time you have on your side. Anyone under 55 should have a very sizeable dollop in shares. If you're under 40, I'd be asking why if you've got less than about 90% in shares. If you're under 60, you'd still expect to see a decent amount.

To sense-check performance, glance at the 3- and 5-year returns rather than panicking about one bad year – markets wobble, that's normal. The 5-year number is the one that matters, and I'd expect average returns of around 5% a year over the long run. A helpful trick is to compare against a mixed bag of global shares – something like an index fund tracking the world's biggest 1,000-ish companies. If that's up 10% in a year and your pension is down 5%, you'd want a convincing explanation. If both are down 5%, that all makes sense. Just make a fair comparison: if you're nearing retirement with more held in bonds

, dilute your expectations accordingly.

5. Why should I nominate a beneficiary?

Nominating a beneficiary is you telling your provider who should get the money if something happens to you. If you don't, it's not always obvious where it goes, and it can get complicated for the people you leave behind, especially if you're divorced or have a more complicated family situation. It's usually a two-minute form in the app or online.

6. How do I track down old pots from old jobs?

Every time you change jobs, you tend to pick up a new pension with a different provider. Change jobs a few times and you've got pensions dotted all over the place. That money is still yours – it doesn't vanish when you move on, it just sits there. So the job is to round them up: dig out the paperwork and get a handle on what you've got and where.

Do you have to combine them all into one? There are some ifs and buts. The golden rule is to check whether any of them have valuable guarantees or chunky exit fees before you do anything. Call each provider and check it's NOT a defined benefit (or ‘final salary’) pension, that there are no valuable guarantees attached, and that there are no nasty exit fees. If it's just a bog-standard defined contribution plan with none of those, consolidating can be a good idea purely from an admin point of view – it makes it far easier to keep track of what you've got.

7. What does my employer contribute to my pension?

Under the current rules your employer puts in at least 3% up to a certain level, and you put in 5%. But here's the good catch: some employers will match you if you pay in more, up to a point. Pay in a bit extra and they up theirs too – that's money you might be leaving on the table. Ask HR or your line manager what the matching policy is. It's one conversation. And if you opt out entirely, remember you're waving goodbye to that employer contribution as well as your own contributions – so opting out is turning down money from your boss too. More people may be tempted to opt out as the cost of living bites, but it should really only be an emergency move if you genuinely have no alternative.

One more thing worth a look: How do I check if my pension provider offers good service?

How long do they take to answer the phone – is there even a phone?! Some providers put you straight through to a knowledgeable human; others funnel you down chat routes or leave you on hold for 45 minutes. What's the app like? What do people say on the App Store or Trustpilot? Some providers have genuinely helpful apps that hardly anyone downloads or uses. And if you really want to geek out, you can search for the IGC (Independent Governance Committee) value-for-money reports – but reader beware, these are heavy going

In short

Find it, check the balance, check the fees, check how it's invested, nominate a beneficiary, round up the old pots, and find out what your employer will match. None of it is scary – most of it is two-minute admin – and you'll probably be surprised by how much you've already got.