Looking to build up a nest egg for when you retire? The chances are you’ll have a pension. The aim of a pension is to provide a means of living once you’re no longer earning a wage. Simple in theory, challenging in practice.

As people live longer, the retirement age goes up. For men in the UK, it used to be 65, and it used to be 60 for women. Now it’s 66 for men and for women, and at that age, you can start to receive your state pension. Crucially, you’ll receive your state pension whether you work or not, once you reach retirement age. This may be among the most important provisions of UK pension law, because given the current state of, um, state pensions, living off them alone is next to impossible for most.

I cannot speak for everywhere, but in the UK, pensions have been a source of difficulty for some time. Paying out state pensions costs the government a great deal of money, especially seeing as people are living longer (hence why the retirement age increased, and it will almost certainly increase again at some stage). Another means of combating a depleting pension fund is to have employers (and their employees, if they can afford to) pay into private pension funds. A lot of businesses have historically offered private pensions anyway.

It goes without saying that when you switch jobs, your previous employer no longer actively contributes to your pension! However, it is entirely possible for the accrued funds to increase in value over time. In theory, a pension pot can slowly-but-surely build up. However, the pension departments that oversee these pots can make decisions on a person’s behalf (or at their instruction) that can actually lose those funds their value, thanks to the chaotic world of financial markets and investment schemes. Therefore, you could reach retirement age, and discover your private pension scheme with employer A is effectively worthless!

Why am I thinking about this? Well, whilst I still have roughly two decades of work ahead of me, I do rather want to ensure that when I reach retirement age (whatever that happens to be), I have the means to support my loved ones and I. My expectation is that I will not retire at state pension age, because I won’t be able to afford to. As much as I have worked since I was 18, my motley collection of private pensions and my National Insurance contributions (the method by which state pensions are funded) is not going to be a big pot. In fact, my most realistic belief is that I’ll be working well into my 70s. You never know (there might be a lottery win one day!), but that’s my belief.