Spotlight on Pension Consolidation

Jessica Amodio
Partner & Independent Financial Adviser at GDA

If you have accumulated a few pension plans over the course of your career, it can be difficult to keep on top of what you have and how they are each performing. Each of your employers may have provided you with access to a workplace pension plan, and you might have also started personal pension plans for yourself, particularly if you’ve been self-employed at some point. This means you could end up with a number of different pension plans with a few different providers. It’s usually possible to combine your pension plans into one pot, but there are things to consider before you do so.

Combining your pension plans could benefit you by:

Providing lower charges
Every pension plan has its own set of charges and you may find that you can save some money by only having one set of fees.

Keeping things simple
Having one pension plan means that you can cut down on the paperwork associated with managing your plan. You have one log-in, and one point of contact for any administration tasks such as changing your address. This means that you can easily make sure you are on track to meet your retirement goals.

Greater opportunities
Combining your pension plans means that your pension value is greater, this can allow you to access discounts on your fees. Moving to a single pension provider can also allow you to choose a provider who gives you access to a wider range of investment funds.

However, some of your existing pension plans might come with special benefits and guarantees that you would be giving up if you transferred your pension savings to a different scheme. For example, some ‘defined benefit’ or ‘final salary’ pensions entitle you to a certain level of income in your retirement. Other pension plans may have valuable guaranteed annuity rates. Additionally, you need to check for any penalties you may incur for transferring your pension plan, as well as checking whether the charges are currently more preferable than an alternative provider, and therefore worth keeping.

Whether you need a financial adviser to transfer your pension depends on the type of pension you have and its value. In some cases, you are legally required to get financial advice, while in others it's a matter of personal preference. An adviser is a valuable tool and our advisers are always happy to have an initial conversation to find out if it would be worthwhile for you.

This article isn’t personal advice. If you’re not sure whether a course of action is right for you, ask for financial advice.