Multiple Pensions: A Guide to Consolidation

A job for life is no longer the default option. Moving between companies is easier than ever, and it’s not unusual to change careers, even more than once, over the course of a working life.

15th April 2021

If you set up a new pension every time you move employers, it’s easy to build up half a dozen or more by the time you retire. It can be difficult to keep track of multiple pensions, particularly if you move home or if your former employer goes out of business.

Whether you are approaching retirement or just planning ahead, it may be time to think about a pension review to make sure your retirement plans are on track.

Types of Pension
You may have accumulated several types of pension over the years, for example:

Consolidating Personal Pensions and Occupational Money Purchase Pensions is normally a fairly simple exercise. However, care should be taken, as some schemes offer certain guarantees and benefits that would be lost on transfer.

If you have a defined benefit pension, this will need to be carefully reviewed to determine if transferring it is in your best interests. For most people, the guarantees far outweigh the benefits of consolidation.

While reducing the number of pensions you hold can be beneficial, it’s important to consider each plan on its own merits to ensure that you are not disadvantaged.

Benefits of Consolidation
There are several reasons why consolidating your pensions could be the best option for you:

Potential Disadvantages
While consolidation has its advantages, there are a number of reasons why it could be beneficial to leave things as they are. For example:

If you are considering consolidating your pensions, it is recommended that you seek financial advice to determine if this is in your best interests.

Please do not hesitate to contact a member of the team to find out more about your retirement options.

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