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Home > Blog > Pensions > How Do I Consolidate My Pensions?
Two thirds of employed people pay into multiple pension pots throughout their career, with 15% of us paying into four or more.
If you’re 41 or under, you are among the most likely demographic to have more than one pension scheme on the go. These statistics are likely due – at least in part – to the higher number of job-moves among millennials and Gen Z.
If you have paid into multiple pension pots through various employments or via a combination of workplace and personal schemes, it can be tough to keep track of your hard earned pension savings.
For this reason, many people ask “how can you consolidate your pensions to make them more manageable?”.
In this article, we explore pension consolidation, how it works and why merging pension pots could be a very intelligent move.
If your retirement savings are currently spread across multiple pension pots, consolidation could be a great idea. Pension Consolidation may not be the right approach for everyone, so please speak with a regulated pension specialist before consolidating your pensions.
This approach involves switching your pension funds from each scheme into one “pot”. There are many ways in which pension consolidation could help you, including:
Pension consolidation can make it easier for you to assess, maintain and eventually withdraw your funds. It can also make retirement planning a much more straightforward process.
Tailored Savings Plan
You can choose the type of pension scheme into which everything will be paid, allowing you to select an option that works best for your unique requirements. If you have multiple old workplace pensions, these schemes would have been created for the benefits of all employees and not be suitable for you.
Reduced costs and/better performing
It may be possible to move your funds into a scheme that charges lower fees or has better growth for a similar risk strategy.
Peace of mind
Knowing that all your savings are in one, easily accessible place will make planning for retirement a much easier and more relaxed process.
Not all types of pensions can be combined, so it’s worth checking with your providers, or with a financial specialist if this is something you’re considering.
Before merging pension pots, you first need to think about where you eventually wish to keep all of the funds. It’s important to choose a particular pension pot into which the money is to be paid.
You could consider transferring everything into your current workplace pension if allowed It’s also possible to open a brand new scheme of your choice, then move all funds into this one.
Whatever you choose, you should take time to weigh up the pros and cons of each pension product before you commit. We’d always recommend speaking with a professional adviser before making any decisions, or you could be potentially making a very expensive mistake.
You should take into account any fees involved, the different ways in which the scheme pays out, the provider’s investment approaches – and, of course, whether or not they will accept the transfer in the first place.
The easiest manner of combining pensions is to get in touch with a specialist pension adviser such as Hilltop Finance.
Our experts can advise you whether pension consolidation is right for you, detail your pension options and have access to the whole of the market to find the best pension plan for you.
If you’re wondering “can I combine my pensions myself?” The answer is yes. However, it’s still worth asking for advice and guidance from a professional pension adviser like Hilltop Finance to ensure you’re making the best possible decisions.
Before you start, you need to check whether there is a fee to transfer your money and any guaranteed benefits that you may be losing by moving your pension funds.
You’ll usually be able to transfer your pension within two to three weeks from sending your application to your providers – although some schemes may take three months or longer to complete the process.
The speed of the transfer will depend on its complexity as well as the number and variety of types of scheme you wish to combine. Your current providers may also investigate the reasons you wish to transfer or where the money is being invested due to the prominence of pension scams. If your transfer is being executed by a regulated financial adviser, your adviser should handle any issues and make the transfer as smooth as possible.
If you wish to consolidate all pensions into one manageable scheme, the process can be made very straightforward with the help of a specialist financial adviser.
Once all of the steps are complete, you may be able to enjoy a more manageable way of saving for retirement.
For information about the pension services available at Hilltop Finance, simply contact our experienced team today for a free, no obligation chat.
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