Have you accumulated more than one pension throughout your working life? Are you now thinking “Should I consolidate my pensions?”

Pension consolidation can be a good way to get to grips with your old pensions and potentially improve your future retirement income.

On average people now change jobs several times during the course of their working life. So, it’s not uncommon to join a new workplace pension for each job as you will have different employers. This means that you may end up with multiple pensions, each managed by a different pension provider.

It can be very difficult to get a clear picture of your total retirement savings. Whether you are on track to have a big enough pension pot to achieve the income you need in retirement. Plus, accurate information to show you how your pension investment funds are performing and what fees you’re paying.

Consolidating pensions may mean bringing them together into one new pension plan. So, you can manage your retirement savings in one place.

The Benefits And Key Points Of Consolidating Your Pensions

The benefits of combining pensions

All your pensions together in one place

If you have various workplace pensions or personal pensions, it can be pretty tricky to keep track of your retirement savings. When you combine pensions you only need to track one pension plan. You don’t have to deal with lots of paperwork from several different providers. This will make it easier to estimate the pension income you can expect to receive from your plan. Taking less time to see how your pension investments are performing.

A pension pot that’s simpler to manage

Many older pension plans are old-fashioned, inflexible and a have a limited fund range. These same providers communicating via post, with no online access. They may not allow flexi access drawdown pensions that many people need these days.

Combining pension pots within one new pension plan enables you to manage it online. This makes it easier to check your fund values, pay extra contributions or see your projected retirement income.

Consolidating pension pots can make managing your retirement money easier. Putting you back in control of your pension savings.

Better performing funds

It’s difficult to keep track of fund performance when you have several pensions.

Many people move their pensions because their existing pension funds are under performing. They want a plan that offers more fund choice with better returns. One that will increase their retirement savings. Existing funds are often out of line with your current attitude to risk and views on investments.

We can help you choose the right funds and make sure than any new plan is tailored to your individual circumstances.

Lower fees

It’s not easy to check the fees you’re paying to multiple pension pots.

Especially, when you’ve got several different pensions, each with many funds. This makes it very difficult to calculate the total charge that you are actually paying. New plans tend to be more transparent with their fees and often have lower costs.

We can help you choose lower cost plans that are right for your individual needs.

Things To Consider Before Consolidating Your Pensions Into A Single, Good Value Pension.

Exit Fees

Some pension schemes, especially those started before 2001, may charge you an exit charge if you move your money. The fee will usually be a percentage of your pension savings. If your pension is in a ‘with-profits’ fund then your exit penalty may come in the form of a Market Value Reduction (MVR). If you’re thinking about combining your pensions we can check your paperwork or speak to your pension provider on your behalf, establishing if any fees apply before you take action and switch to a new provider.

Pension Exit Fees

Even if you’re going to pay exit penalties and they are small, it may still be a good idea to consolidate pensions. Especially, if your new plan provides the flexibility needed in the future, or a lower ongoing charge that may offset the amount you lose. Particularly if it’s only a small penalty and you still have a long time until retirement.

We can help you make that decision as there can be many factors involved that are not always straight forward to understand.

Have You Started Planning For Your Dream Retirement? Get Regular Tips By Email Along With My BONUS Free Pre-Retirement Checklist!

Guaranteed benefits

Before you decide to consolidate your pensions you should also consider if you’ll lose any benefits linked to your old pension arrangements.

If you have:

  • ever been part of an occupational pension scheme such as a defined benefit pension scheme (also known as a final salary scheme or final salary pension)
  • pensions with guaranteed annuity rates
  • section 32 pensions that provide guarantees at your normal retirement age

then you will need to check what will happen to these guarantees if you move your pension money.

We are IFAs and pension transfer specialists, regulated by the financial conduct authority and can provide you with this tailored advice.

If you’ve got a pension with guaranteed benefits that’s worth more than £30,000 it is a legal requirement for you to take independent financial advice before you move it to a different provider.

How To Consolidate Pensions

To consolidate your older pensions, or to cash in small pension pots you will need to contact your pension providers to get a transfer value for each one. Then ask them to transfer the funds into your new pension plan.

Or, as Pension Specialists and Independent Financial Advisers, we can do all this work for you following a financial review. This includes taking the time to understand your attitude to risk, individual needs, personal circumstances and objectives. Once we have carried out this full assessment, we then research and analyse your existing pensions.

We then provide you with our written recommendations including the plans to consolidate your old pension pots into one place.

We provide a pension consolidation service. Get in touch if you need pension advice and want more information on how to combine your pensions

Receive the latest TT Wealth Financial Planning Newsletter along with regular money tips by email:

TT Wealth Jan / Feb 2024 Newsletter
 Your email address will NEVER be shared or sold. You are always free to easily unsubscribe or customise your email preferences at any time. If you have any questions, please contact: tony@ttwealth.co.uk