Help, should I consolidate my pensions?

Help, should I consolidate my pensions?It’s not at all uncommon for clients to have a large number of different pension pots which have been accumulated over a number of years, all with different providers.

Often you start a pension with an employer but then when you change employment leave that pension sitting where it is and start up a new plan with your new employer.

As a result after a time you end up with a number of pots. Each provider sends a statement but they are each slightly different, using slightly different assumptions, and received at different times in the year.

It therefore makes it very difficult to compare one against the other and see which has the better performance.

But what’s the right thing to do with them?

Should you automatically consolidate them into one provider?

Having all your pension entitlement with one provider certainly makes for much easier admin. You now only have one statement to aim to get to grips with rather than the handful you had before.

But don’t assume that consolidating your pensions is necessarily the right thing to do. You need to understand what costs you are paying for each provider, what choice of funds each policy has, and whether there are any penalties to transfer.

Getting one statement instead of 4 will not be a good idea if by transferring you have incurred transfer costs or have transferred your money to a fund which has higher charges.

It is more important that you have an overall investment strategy and that your pension investments match your attitude to risk.

Frequently there is some thought put into the investment strategy at the beginning of a plan but it will often not be reviewed after that.

So don’t assume that a number of different pension policies should be accumulated. It may be that the right thing to do is to leave the policy with the existing provider, but maybe tweak the funds you are invested in.

Download a pension case study to see an example of what I can do to help.

If you would like to discuss your pension plans please do call me on 01932 698150. I’d be very happy to have a chat with you and arrange a no obligation meeting if that is the appropriate next step.

 photo credit: Flickr/ninopnatividad

Mary Waring is a Chartered Accountant, Chartered Financial Planner and Money Mindset Coach, helping women transform their relationship with money so that they can become free and powerful. She is also the bestselling author of "The Wealthy Woman: A Man is Not a Financial Plan."

Read More

If you enjoyed this post, we recommend the following as additional reading. 

Would you turn away a cash sum of £300,000?

The annual Scottish Widows Women and Retirement Report, now in its 13th year was published in November. A copy of the report is available here. But be warned, it doesn’t make good reading. The survey highlights that on average, women have savings pots half the value of men. There are several reasons for this: The ever…

Read More about Would you turn away a cash sum of £300,000?

Why I’m happy to be sexist!

Trading as Wealth for Women and being the author of “The Wealthy Woman: A Man is Not a Financial Plan”, tends to split reaction into two camps. Some women (and men) have found it sexist and patronising. One comment left on my Facebook post recently offering a free digital copy of my book was “I…

Read More about Why I’m happy to be sexist!

Will I run out of money?

“Will I run out of money?” is the question I most often get asked by clients. For most of us it’s the sort of question which will keep us awake at night. For my ongoing financial planning clients this service is provided on an annual basis and updated each year. I would normally only provide…

Read More about Will I run out of money?