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    Pension Consolidation Advice

    Moving pensions for a clearer retirement journey

    Home > Retirement Planning > Pension Consolidation Advice

    Have you had multiple pensions from your working career? The days of ‘a job for life’ are gone and it’s normal to have an employment journey with multiple pensions. It could be easier to keep track of your pension values as you start planning for retirement and it might save you money on management fees. However, like everything in financial planning, there are things to look out for!

    Before you make any decisions, it’s important to know the benefits and charges you are paying for on all of your pensions, not just those you are currently contributing into.

    What is pension consolidation?

    Pension consolidation is the process of combining your pension pots. It’s likely that you have more than one Defined Contribution pension if you’ve had more than one job. It’s also quite common to forget about pension pots if you only worked for a year or so at one company before moving on.

    Unless you weren’t eligible for a workplace pension or opted out, you and your employers will probably have made contributions to your workplace pension. Unless you made changes, you will likely have been invested in the default option for that pension fund. With a pension consolidation you may be able to find a better deal elsewhere, as well as helping you simplify how you manage your pensions.

    Why should I consolidate my pensions?

    Bringing your pension pots together could mean you’re better off. There are pros and cons to pension consolidation, which is why many people ask a financial adviser to help them consider all their pension options and find the most suitable route for them. Here are a few of the reasons why you consider consolidating their pensions:

    Reasons why you should consider consolidating your pensions Find out more

    How pension consolidation works

    Pension consolidation is an administrative task that can streamline your investments and make your retirement planning easier. It is a process you can do yourself – but you may decide to ask for help from a Financial Adviser or dedicated service.

    IMPORTANT: The decisions you make about moving your pension funds are not reversible. You may be giving up important benefits or guarantees. We would recommend taking financial advice before making these changes.

    1. Gather information about your pensions

    You’ll need details of your pensions (but if you don’t know the details of your old pensions but you know where you worked and when, you can use the Government’s pension tracing service to find contact details of the investment manager running the pension fund)

    2. Decide which scheme/s are best for you

    You can request up to date valuations, statements, and find out any associated costs (all schemes will have an Annual Management Charge) so you can get an idea for which one might be best value for you.

    3. Request a transfer of funds

    You can then ask your provider to transfer funds from one scheme to another – or create a new pension pot to move these into. It’s worth remembering that you don’t need to transfer all your pensions in one place. You may want to combine one or two, but keep others separate as they provide you with some benefit – such as a different level of risk, better performance or more flexibility on how you can draw on these funds in retirement.

    Considerations when consolidating your pensions

    If you do want to combine your pensions, you can simply contact the providers and instruct them to do this – but you’re making a decision that will have far-reaching consequences, so it’s really important to consider:

    It is always best to get independent financial advice if you’re considering consolidating your pensions and if you have defined benefit (final salary) pensions, it is a legal requirement to get financial advice if your pot is worth more than £30,000. You can find out more about defined benefit pension advice here.

     

    Understanding pension benefits

    Pension schemes have different features or guarantees known as ‘benefits’. Transferring your pension may mean giving these up, so it’s important to find out how transferring out of a pension scheme will affect you.

    Bringing your funds together may give you more options with your pension, leading to potentially greater returns when you’re ready to take your pension. Like many financial decisions, whether or not you should transfer a pension will depend on your personal circumstances.

    How Wren can help you with pension consolidation

    Financial advisers will ask about how you want to use your pensions, which will help us understand how to structure your retirement plans. This will include questions like:

    • Do you want a flexible / phased retirement?
    • What are your aspirations and goals for the future – and into retirement?
    • How can you use what you already have to help you get there?

    Our advisers will make a recommendation – and if the client wishes – can do all the heavy lifting to put the plans in place. We can take on the significant work of obtaining scheme information and creating a retirement plan. You can also benefit from our Ongoing Advice Service, offering regular reviews and a risk-appropriate portfolio monitored and managed on your behalf.

    Get in touch

    Why choose Wren Sterling to support you with pension consolidation

    • 16,000+

      clients

    • £11bn

      assets under advice

    • 100+

      Financial Planners

    • 98%

      client retention

    Pension Consolidation FAQs

    • How long does it take to combine my pensions?

      How long does it take to combine my pensions?

      If you don’t know the details of your old pensions but you know where you worked and when, you can use the Government’s pension tracing service to find contact details of the investment manager running the pension fund. You can then request up to date valuations, statements, and find out any associated costs (all schemes will have an Annual Management Charge) so you can get an idea for which one might be best value for you.

      How long does this take? It will depend on your provider and how quickly they respond to you. This is an administrative procedure, but the key is to make the most appropriate decisions for you to achieve your retirement goals – for which you may benefit from financial advice.

    • Can I combine my funds into a pension that my employer contributes to?

      Can I combine my funds into a pension that my employer contributes to?

      This will depend on your current employer’s pension scheme, and whether it accepts transfers. Please check your scheme documentation, or contact your HR department or Pension Provider.

    • Can you save money by combining your pensions?

      Can you save money by combining your pensions?

      You may be able to save money by combining your pensions, but this will depend on a number of factors. Some schemes may offer fee discounts for larger pension pots, and some may have larger Annual Management fees, but have better investment performance. We would recommend taking financial advice before making changes to your pension plans.

    • Can I combine my Defined Benefit pension?

      Can I combine my Defined Benefit pension?

      If you have a Defined Benefit Pension, you may be tempted to transfer into the more common Defined Contribution pension. This is an irreversible change. Find out how much your Defined Benefit pension is worth, and whether it’s the right choice for you.

    • Are you able to combine pensions with your partners?

      Are you able to combine pensions with your partners?

      In the UK each person’s pensions are kept separate. You cannot combine your pension with another person’s. However, there are different investments which can allow for joint ownership.

    • Can I transfer my pension to my bank account?

      Can I transfer my pension to my bank account?

      You have the power to choose how you use your pension pot. It’s up to you to manage your spending and ensure that you have enough income to last for the whole of your retirement. You will be able to withdraw funds from your Defined Contribution pension from age 55 (correct as per tax year 2025/26).

      The most important thing to bear in mind when accessing your pensions is that only 25% of your total fund can be withdrawn tax-free (however, if benefits exceed the LSDBA it will be subject to income tax.) So if you’re thinking of withdrawing more than 25%, then you are likely to face 20%, 40% or even 45% tax on those withdrawals, eroding years of pension savings in a moment, which can’t be reversed.

    The contents of this article is for information only and does not constitute advice.
    A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available. Accessing pension benefits early may impact on levels of retirement income and access to means-tested benefits, and is not suitable for everyone. You should seek pension tax advice to understand your options at retirement.
    There may also be taxation implications. You should seek professional advice on your own circumstances. The rates of taxation may also be subject to change.
    The value of your investments can go down as well as up, so you could get back less than you invested.