How do I combine my pensions?

Combining, or consolidating, your pension means transferring your savings from each of your pension schemes into one, making your money easier to manage. You can do this in a number of ways.

Should I use a financial adviser to combine my pensions?

The best way to combine your pensions is by asking a regulated financial adviser to help. Not only will they make sure you won’t be leaving yourself worse off by combining your pensions, you’ll often find that they have negotiated discounted rates with the pension suppliers they use. This means that your pension will be in a better position than when you started.

You can also combine your pensions by going straight to your pension providers, or by using a non-advised service. However, in doing so you would not receive any support or care to make sure you get the best outcome for you.

Why do people combine their pensions?

Having your savings all in one place can make them easier to manage. It’s very common for most people to have multiple pensions and combining them makes keeping track of your money much simpler.

Combining your pensions could also mean reducing the charges that you pay, leaving you better off when you reach retirement.

Why might I have more than one pension pot?

The most likely reason for having more than one pension is changing jobs. For years, employers have offered staff a workplace pension. And since 2012, if you are 22 or over and earning £10,000 or more per year your employer must automatically enrol you in a workplace pension.

So, there is a good chance that you have had a new pension for every job you’ve held. And with the average person changing jobs 11 times in their lifetime1, it’s easy to lose track of where all your savings are located. This is why so many people look into combining their pensions.

How could combining my pensions reduce charges?

Combining your pensions can also mean reducing the annual charges that you pay, which is great news for helping your savings grow.

For example, let’s say you have two pension schemes that work in the exact same way. One charges 3% in annual fees and other charges 1.5%. Transferring all your pension savings into the scheme with a lower fee means you will be cutting the amount you lose each year in half, giving your pension pot more space to grow.

What pensions can I combine?

You can combine any personal pension and most workplace pensions. If your workplace pension is a final salary pension, then you will need to think carefully about transferring out of this scheme. This is because they hold valuable benefits that are best to hold on to.

There are a few types of pensions that cannot be combined. These include the State Pension and any unfunded public sector scheme which covers organisations and professions such as the NHS, teachers, armed forces and the police.

1 https://www.gov.uk/government/news/thousands-more-make-contact-with-long-lost-funds

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