Should I consolidate my old pensions?

Sometimes. It can cut charges and make a plan easier to manage. Older schemes can carry guarantees that a transfer gives up.

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What consolidating gains you

What can make consolidating the wrong move

Check every old scheme for these features before anything is transferred.

Guaranteed annuity rates
Common on pensions sold in the 1980s and early 1990s, and often at rates no modern product comes close to. Transferring gives the guarantee up.
Protected tax-free cash
Some older contracts allow more than the usual 25% tax-free, and the protection is normally lost on transfer.
A protected retirement age
A handful of older schemes let you take benefits before the normal minimum age. That protection can also be lost.
Defined benefits
A final salary or career average scheme is a promise of income.
Exit penalties
Some older contracts still carry them, and they can be substantial before a particular date.
Employer contributions
Consolidating a current workplace scheme usually means losing the employer contribution.

Check every old scheme for guaranteed annuity rates, protected tax-free cash and exit penalties before anything is transferred.

Related questions

How many pensions is too many?

There is no set number. What matters is whether you know what each one is invested in, what it costs, and who gets it if you die.

Will consolidating lose me money?

It can, if it gives up a guarantee, triggers an exit penalty, or moves you from a cheap old scheme to a more expensive new one.

Can I move my current workplace pension?

Usually you can, but you would normally stop receiving the employer contribution while you are still employed there. Consolidating previous employers' schemes is the more common move.

Does consolidating improve performance?

Not by itself. It lets one strategy be applied to the whole amount, and it can lower the total cost.

Where this fits

Every scheme gets checked for those features before anything is recommended.

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The advisers for this subject

Sunny Bharj

Sunny Bharj

Independent Financial Adviser

Tony Springer

Tony Springer

Independent Financial Adviser

Advising through Equity & General Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority. Check the firm on the FCA register under number 474163.

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