Planning & protection
Over time, it is easy to lose touch with pension savings providers as we change jobs, move home and the companies we have worked for change ownership or close down. All these events over time may make it very difficult to find your valuable pension savings. So that means potentially ending up with a number of different pension pots. If you’re one of the millions of people with multiple pension pots, it may be appropriate to consider consolidating your defined contribution pension pots and bring them together.
Even if you have not had many jobs, you could still have a number of different pensions to keep track of. If appropriate, pension consolidation can simplify your finances and make it easier to keep track of your retirement savings.
Having said this, not all pension types can or should be transferred. It’s important to obtain professional advice so you know and can compare the features and benefits of the plan(s) you are thinking of transferring.
Pension consolidation is the process of combining multiple pension pots into one single pot. This can be done with a pension transfer or by opening a new pension and transferring your other pensions into it. You may want to do this to make it easier to keep track of your retirement savings, or to try and get a better rate of return on your investment.
But there are a few things to consider before consolidating your pensions, such as any exit fees that may be charged, and whether or not you will lose any valuable benefits such as guaranteed annuity rates.
If you think you might have lost a pension pot from a previous job, you can use the government’s Pension Tracing Service. This enables people to locate money previously saved for retirement, that is unclaimed. So, it is worth checking if you could have pension funds that have not been claimed.
Finally, you also need to bear in mind that pension savings are big targets for fraudsters. If someone contacts you unexpectedly offering to help you transfer your pot, it’s likely to be a scam. If you’re concerned, contact the Financial Conduct Authority (FCA) to check they’re legitimate.
You only have one retirement so you don’t want to make a costly mistake with your pensions that you could one day regret. Before you look to bring your pensions together, it’s essential to obtain professional advice. For more information about how we can assist you through this complex process, please contact us to discuss your situation.
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A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless plan has a protected pension age).
Your pension income could also be affected by the interest rates at the time you take your benefits.
The value of investments may fluctuate in price or value and you may get back less than the amount originally invested. Past performance is not a guide to the future. The views expressed in this article represent those of the author and do not constitute financial advice.