Should I Consolidate Multiple Pension Pots?

How to best manage pension pots effectively and efficiently.

Have you worked for several different employers? If so, it’s possible that you could have a workplace pension from each of them. Perhaps you’ve also set up a personal pension, too.  It may be worth considering pension consolidation to simplify your pension arrangements and make it easier to manage your pension savings efficiently from a single pot.

EASY-TO-MANAGE

So, is it worth consolidating all your pension savings into a single pot? Like all things, there are pros and cons.  The best course of action will depend on what kinds of pension you have and how long you have until retirement.

Having several different pensions could mean paying several different charges.  It also means you’ve got to think about where you’ve invested the savings in each of your different pensions to make sure you’re keeping an eye on performance.  You will also have to deal with numerous pension providers to get valuations, re-arrange your investments or alter your contribution levels.

THE PROS AND CONS

Your pension is important, so it’s crucial that you take the time to understand exactly what you’ve got and what you’d be giving up if you transfer out of an existing pension.

Before transferring any pots, you need to be sure that you’re not giving up any protected benefits like tax-free cash or low pension age.
You should also consider any features your plan has, like guarantees or life assurance benefits.

Remember that what you get back depends on several variables, such as how your investments perform and how they’re taxed, and you may get back less than you invested.

If you are considering consolidating your pension accounts you should obtain professional financial advice, as this is a specialist area.  There are many factors to consider before making a decision, and we can advise you on the right course of action for you.

A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.

PENSIONS ARE NOT NORMALLY ACCESSIBLE UNTIL AGE 55. YOUR PENSION INCOME COULD ALSO BE AFFECTED BY INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS. THE TAX IMPLICATIONS OF PENSION WITHDRAWALS WILL BE BASED ON YOUR INDIVIDUAL CIRCUMSTANCES, TAX LEGISLATION AND REGULATION, WHICH ARE SUBJECT TO CHANGE IN THE FUTURE.

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