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Should I combine my pensions

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    If you have a lot of small pension pots or multiple pensions then Pension Consolidation could make it easier for you to track your money, control where and how you invest your pension and could reduce the fees you are paying.

    But transferring your pensions could mean you lose valuable benefits you might not even know you have, so you have to make sure you get the right advice before you transfer anything.

    If you're unsure get in touch today and our pension transfer specialists can help you decide what's right for you.

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    No commitment, no hard sales, just a quick chat with one of our pension transfer specialist to see if we can help

    Should I combine my pension pots?

    If you’ve had more than one job in your lifetime, It’s possible that you’ll have built up multiple pensions. There’s no limit to the number of private pensions you can build up over your lifetime but you might find it difficult to keep track of them all if you’ve built up multiple pension pots. We are frequently asked by clients “should I put all my pensions together?” – here’s a quick overview:

    Combining your pensions into one pot could:

    • Make it easier to manage your finances and track your retirement goals
    • Offer a greater choice of investment funds and access potentially higher returns
    • Offer increased flexibility for accessing your pension
    • Potentially lower your investment costs

    If you have pensions with valuable guarantees, it might not be in your best interests to move it, even if it makes sense for the reasons listed above. Check out our blog post What to do with multiple pensions for more details of the pros and cons of combining your pensions.

    What to do with multiple pension pots?

    Over time you might accumulate multiple pension pots as you move from job to job.

    The good news is that when you leave a job your pension stays invested in your old pension scheme unless you opt to move it, so you don't have to do anything.

    The value of your old pension pot will be reliant on the investment performance of the pension fund your old employer has chosen and will be subject to fees as set out by the scheme.

    If you've built up multiple pension pots. You’ve usually got 3 options for what to do with them:

    1. Leave it where they are
    2. Move your old pension pots to your current employer’s scheme
    3. Move your old pension pots to a Private Pension that you’re in charge of

    In all cases it's important to understand the associated costs and implications of moving any pensions before you do so.

    Whilst it might be easier to track and manage your money in a single pension pot, it's important to make sure that you won't be giving up valuable benefits by doing so.


    If a pension has valuable benefits attached to it, then it's best to leave it where it is.


    Important Note: If you have a Final Salary Pension the situation is very different. The amount you receive is guaranteed. It is not subject to investment fees or reliant on the performance of the fund (unless it fails, and you’ll be covered by the PPF). Read our Definitive Guide to Final Salary Pensions for more information.

    What age should I consider consolidating?

    There’s no right or wrong age for combining your pensions as long as it makes financial sense considering all the risks and benefits and you are doing it for the right reasons. It’s likely you’ll have different reasons in your 50s and 60s than someone who’s considering a transfer in their 30s or 40s.

    If you are approaching retirement or want to flexibly access your pension from 55, then you might find it easier to combine your pensions.

    Equally,if you want to purchase an annuity at retirement, you may be offered a better rate if you combine your pensions.

    • And if you want to flexibly access your pension through pension drawdown, you’ll almost certainly find it easier to keep track of how much you have in your pension pot and what charges you are paying if it’s all in one place.

    If you are paying excessively high fees that could be reduced by moving elsewhere then the earlier you move your pension, the better as the effect over time could erode the value of your pension pot.

    The benefits of pension consolidation

    As with most financial decisions, there can be pros and cons to combining your pensions. As long as you’re not giving up valuable benefits it can make a lot of sense to manage your pensions in one place, especially if you’re moving them to a Self Invested Personal Pension (SIPP).

    Some of the benefits include:

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      Greater investment choice and control

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      Flexibility to access drawdown

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      Potential to save on fees

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      Potential to access better-performing investment fund

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      Leaving an Inheritance*

    *It’s worth noting that Defined Contribution Pensions and SIPPs can usually be passed on free of Inheritance tax to named beneficiaries.  The fewer pension pots you have, the fewer pension scheme trustees you’ll need to keep updated of address changes, beneficiary changes and it will be easier to manage.

    Find out more about the benefits of transferring multiple pensions.

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    Reasons why you shouldn’t transfer

    As with most financial decisions, there can be pros and cons to combining your pensions. As long as you’re not giving up valuable benefits it can make a lot of sense to manage your pensions in one place, especially if you’re moving them to a Self Invested Personal Pension (SIPP).

    Some of the benefits include:

    • exclamation-mark-in-a-circle


    • exclamation-mark-in-a-circle

      Greater investment choice and control

    • exclamation-mark-in-a-circle

      Flexibility to access drawdown

    • exclamation-mark-in-a-circle

      Potential to save on fees

    • exclamation-mark-in-a-circle

      Potential to access better-performing investment fund

    • exclamation-mark-in-a-circle

      Leaving an Inheritance*

    *It’s worth noting that Defined Contribution Pensions and SIPPs can usually be passed on free of Inheritance tax to named beneficiaries.  The fewer pension pots you have, the fewer pension scheme trustees you’ll need to keep updated of address changes, beneficiary changes and it will be easier to manage.

    Find out more about the benefits of transferring multiple pensions.

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    The Impact of High Charges on Your Pension

    Some older pension funds can have high investment charges compared to what is currently available on the market, so it may be possible to match the quality of the investments without the high price tag.

    High investment charges can erode the value of your pension pot over time. For Example: If you invest £8,000 a year for your retirement 20 years away, and the fund’s total costs are 2.5% of the money invested, and the fund manager achieves an average return of 6% a year before fees, your savings pot will grow to £232,676

    Impact of management fees on pension value

    But, if the management fees were lower, at 0.8% , you would have made £288,516 — a £55,840 difference shown on the chart. If you continued to pay the higher annual charge, 19.4% of your savings would disappear in extra costs.

    Consolidating your Pension for Flexi-access Drawdown

    Flexi-access Drawdown was introduced with the Pension reforms of 2015. It removed the previous limits on how much you can take from your pension in any one year.

    It’s now possible to access your Pension from 55 and you can take up to 25% of your pension as a tax-free lump sum, but you don’t have to take it in one go. If you want to take it in chunks or take an income from your pension, you can do that too.

    Because Pension Drawdown is fairly new, some older pension funds aren’t set up for it, and you may need to move your money to a different pension that allows it.

    As long as you’re not giving up valuable benefits, it may be easier for you to manage your money in retirement if it’s all in one place.

    You might also be interested in trying our pension drawdown calculator (click here).


    Multiple Pensions Tax-Free Lump Sum

    Another benefit of the Pension Freedom changes is that you can now take 25% of your pension pot as a tax-free lump sum once you turn 55.

    If you have multiple pension pots you are entitled to take a 25%  tax-free lump sum from all of them or If you have £30,000 or less in all of your private pensions, you can usually take everything you have in your defined benefit pension or defined contribution pension as a ‘trivial commutation’ lump sum. If you take this option, the first 25% is taxfree, you’ll pay tax on the rest.

    If you are a higher rate taxpayer, or if this money takes you into the higher rate tax bracket for the year, you could end up paying 40% tax on 75% of your pension pot.

    Frequently Asked Questions

    How do I find out where I have pensions?

    Tracking down a personal or workplace pension

    If you're looking for old pension pots there are a number of ways you can find them.

    If you’ve been a member of a pension scheme then they must send you a statement each year.

    These statements include an estimate of the retirement income that the pension pot might generate when you reach retirement.

    If you’re no longer receiving these statements – perhaps because of changes of address – then to track down the pension there three avenues you can pursue:

    • The pension provider
    • Your former employer if it was a workplace pension, or
    • The Pension Tracing service

    Contacting the Pension Provider

    If you know who your pension was with you can contact the pension provider directly and ask them for help in tracing your pension. 

    Provide them with as many details as possible. Including:

    • Your plan number
    • Your date of birth
    • Your National Insurance number
    • The date your pension was set up

    The Money Advice Service have created a handy template letter  you can use here.

    Tracing an old workplace pension

    If you had a workplace pension then you can contact your old employer directly.

    However, if your employer provided access to a personal or stakeholder scheme, then you should contact the pension provider if you know their details.

    If you don’t know the pension provider’s details, your old employer should be able to tell you.

    Again, try and provide as many details as possible 

    • Your plan number
    • Your date of birth
    • Your National Insurance number
    • Dates of employment
    • The date you joined the pension scheme

    Using the free pension tracing service

    If you’re still struggling to find your old pensions – perhaps because you can’t find your old employer, or you don’t know the provider of an old personal pension – you can contact the Pension Tracing Service.

    This is a free service which searches a database of more than 200,000 workplace and personal pension schemes to try to find the contact details you need.

    You can phone the Pension Tracing Service on 0800 731 0193 or you can use the link below to complete an online request form.

    Can I consolidate my pensions myself?

    You may be able to consolidate your pensions yourself but you should be very careful about doing so. 

    Whilst some pension providers make pension transfer sound like the sort of thing you can do over a cup of tea, doing so could prove extremely costly to your future.

    Protecting valuable pension benefits

    Some pensions have incredibly valuable benefits attached to them which will be lost if you transfer.

    Pension Benefits could include (but are not limited to):

    • Protected pension age (for early retirement)
    • Fixed annuity rates  
    • Tax-free cash
    • Life insurance
    • Loyalty bonuses
    • Terminal bonus

    You may also incur penalties to transfer.

    So it's important to have a Pension Transfer Specialist take a look at your old pensions and make sure that you haven't missed something that you might regret giving up.

    Better safe than sorry.

    The problem with self-management & pensions

    In the age of robo-advice and easy ways to invest, it might seem like a good idea to manage your pension yourself but the research makes for grim reading.

    Research by Insurance giant Zurich found that almost 41% of those in drawdown without financial advice will run out of money in retirement.

    The research found that​​​​​​​ a large percentage of self-investors were unprepared and uneducated about the risks they were taking on. Despite that many were choosing to go it alone without consulting a financial adviser. 

    If your motivation for consolidating your pension yourself is to save money, you should consider the high cost of making a mistake and also look at the research published in 2019 showing that, even when you take fees into account, those who take Financial Advice end up on average nearly £50,000 better off over a decade.

    Can I see all my pensions together?

    It should be possible to include all of your pensions and investments on our pension dashboard so that you can see all your investments in one place.

    We have our own pension dashboard which can be access online and via our own app and we can also provide access to a number of pension platforms who offer excellent online access.


    Feel free to contact our team to discuss your needs and we can advise on the best pension dashboard/platform for you.

    How much does it cost to transfer a pension

    The full cost of transferring your pension will depend on a number of factors:

    • How much you pay for transfer analysis and advice
    • Any exit fees or penalties from your existing pension providers
    • What type of investment you choose afterwards
    • and whether you choose to receive ongoing advice

    At 2020 Financial we work on a transparent, fee-based structure, details of which can be found on Our Fees page. If you book a free initial consultation we will be happy to talk you through the options open to you and the potential costs of moving your pension/s.

    Whilst the cost of transferring your pension may seem expensive, you are buying a future plan for your money that suits your retirement goals. With the right financial advice, your chances of achieving your financial goals are greatly increased. A good financial advisor should help you maximise returns in a strong market and minimise your exposure to risk and loss in a downturn.

    Should I transfer pension from previous employer

    When you move jobs, you leave your old workplace pension scheme, but you don’t lose the benefits you have built up.

    You can keep your old pension where it is or move your pot to the scheme offered by your new workplace.

    But if you are thinking about doing this, it is important to do it for financial – and not emotional – reasons. It’s crucial that you don’t move your pension pot out of a first-rate scheme simply because you want to cut all links with an old employer.

    If there is no compelling reason to leave your old pension where it is, you may have the option to port your old workplace pension to your new employer’s scheme.

    Alternatively, you could move it to a SIPP where you have more control over how it is invested.

    How long do pension transfers usually take?

    It depends. We have heard of some transfers taking up to 6 months.

    We have a streamlined process because you will always deal directly with the Qualified Pension Trnasfer Specialist who will be undertaking the work and giving the advice.

    Depending on the complexities of your scheme, and the responsiveness of your pension scheme trustees it could take anywhere between a couple of weeks and a couple of months for the entire transfer to be completed.


    Once you've engaged us we'll arrange a chat over the phone, by Zoom or in person and talk through the details with you and establish what your goals are. 

    Our expert advisors will then carry out research to understand if you have any valuable benefits attached to your pension that it would be in your interest to keep and prepare a full report.

    The research and report stage normally takes 3-4 weeks, depending on how quickly you can provide the necessary information.

    It'll also depend how long it takes your existing pension scheme administrators to provide any requested information.

    We’ll also draw up a plan to maximise your investment returns moving forward to help you meet your retirement goals.

    Once you decide to transfer we can get the paperwork drawn up in a couple of days.


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