During a 35 to 40 year working career, on average, people move every seven years, which means you could end up with 5, 6 or more different pension pots to keep track of.
Pensions are much better value and more flexible than they used to be.
Having several pension pots can mean you do not have a clear idea of what your accrued benefits are, or what they're likely to be when you retire.
Not only that, there's the practicality that keeping track of several pots can be difficult and there's even a risk that some older or smaller pots of money go unclaimed.
When you move home or your circumstances change, including getting married, having children, getting divorced etc., it means you have to inform several different pension providers each time you want to inform them of a change of address or your nominated beneficiaries. Wouldn't it be much easier to just have to inform one? Therefore, consolidating your pension in to one pot can make a lot of sense, subject to the charges, investment options and plan flexibility.
The options include sweeping up previous employer pensions in to your current workplace pension. Alternatively, or if you are self-employed, you may prefer to set up a separate pension over which you have more control and use that to consolidate your various pension pots.
However, if any of your previous pensions have 'defined benefits', it's not as simple as just "sweeping up" and transferring the benefits. For more information about that, please refer to our Pension Transfers page.
There may also be other implications to consider. For example, the death benefits, Inheritance Tax, safe-guarded rights and entitlements to state benefits and long term care planning, to name a few. Each and every person with a pension scheme will need to review their financial planning options accordingly and if you’re thinking of consolidating a pension pot worth £30,000 or more, you must obtain professional advice.
Although it should be simple, it’s usually not. Therefore, don't risk it and talk to us. We’ll guarantee to help you make the right decisions about securing your financial future.