Pension consolidation

Should I consolidate my pension?

If you’ve had more than one job during your working life, it’s likely that you will have opened more than one pension during this time.

Having multiple plans can make it difficult to keep track of your money. You may not know how your pensions are performing or the charges you are paying – and ultimately the amount of money you can look forward to in retirement.

There’s a lot to consider, so the best thing to do is to get independent financial advice from an expert who is not incentivised to recommend a particular scheme. They can set you straight on your current and likely future value of your pension.

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What are the advantages of consolidating your pensions?

Easier admin – it’s easier to track your investment, and work out what your retirement will look like

Review charges – consolidating your pension may allow you to find a plan with lower charges, higher returns and more control

Greater purchasing power – if you’re considering an annuity or income drawdown, combining your pensions may help you to get a better deal

What are the disadvantages of consolidating your pensions?

Irreversible – Consolidating your pensions cannot be reversed, so you’ll need to think carefully before you make a decision

Exit fees – some pensions have high exit fees to discourage you from switching

Losing benefits – some pensions have benefits which you can lose if you transfer away

DB pension schemes – DB transfer schemes above £30k must be approved by a financial adviser to make sure that it’s the right decision for the long-run

What about defined benefit (DB) transfers?

If you have a DB or final salary pension worth over £30k, and are considering transferring away from this scheme, you may need the help of an adviser to find out watch your options are, and help you make the switch.

Remember: Final salary pensions are designed to provide an income for life. In order to move out of a final salary scheme, your adviser must be able to demonstrate that it is in your best interest.

Should I consolidate my pensions?

Penalties, exit charges or benefits may be lost if you transfer your pension, so it’s important that you fully understand your options and make a choice that’s appropriate for you. If you’re wondering whether or not to consolidate your pension, bear in mind that this decision will depend on your individual situation – when you plan to retire, how many pension pots you have, what they’re worth and their terms, your family and their aspirations – the list of considerations is endless, but they cannot be ignored if you’re to make the right decision for you.

How an independent financial adviser can help

We would recommend seeking help from a financial adviser before you make any decisions about your pension – as you may not be able to reverse your actions. An adviser can help you calculate when you will be able to retire, review all your pension schemes, and discuss your motivations to help you achieve your retirement goals.

By taking professional advice, you can gain confidence in your retirement plan, and be sure that you’re taking the most appropriate course of action for you.

If you’re looking to review your pension provision, hoping for a better return on your investment, or wondering what your options are for consolidating your pension, you can get in touch with one of our financial advisers for a pension review

IMPORTANT

The value of your investment can go down as well as up and you may not get back the full amount invested

Accessing pension benefits early may impact on levels of retirement income and is not suitable for everyone. You should seek advice to understand your options at retirement.

Transferring a DB pension scheme

The transfer of a DB scheme could be the single biggest financial decision you ever make and it’s vital to make the right decision to support you and your family in retirement. Transferring a DB pension is a highly involved process that requires the creation of a specialist report and pension transfers can only be advised upon by specially qualified financial advisers. If you’d like to contact one of our trained advisers, use the button below.