I have had many jobs, I have many pensions, should I combine them all?

I have had many jobs, I have many pensions, should I combine them all?

I get asked this a lot! It is about as far as many people’s financial planning goes. It seems every time I listen to the radio, I hear an advert about how someone’s life is now so much more relaxing since combining their pensions.

Question is, just because a voice artist on the radio tells you how at peace they now are, is it the right thing for you to do?

For many people, combining pensions (particularly if small) is unlikely to make a

significant difference to your overall financial plan, but there are some points to be aware of:

·         Most importantly, does your plan contain any benefits or guarantees that will be lost upon transfer e.g. Guaranteed income, higher level of tax-free cash entitlement.

·         Compare charges, pensions typically charge a % fee, others may have monthly fees etc.

·         Exit charges – this is typical with older pensions but does still exist. They may take a hefty charge if you transfer away.

·         Investment choice in both – this is mentioned a lot but many pensions have a reasonable range of investments.

·         You may have a protected pension age on previous pensions, transferring could lose that age meaning you can’t access them until age 55 (increasing to 57 from April 2028).

·         Is multiple pensions really causing you an admin headache?

·         Don’t close your current employer pension by accident. This could lead to an admin nightmare.

This is probably one of the least interesting parts of financial planning, but it is one of the many things we will look at when we put a financial plan in place for you. Although combining your pensions may not give you peace of mind like you are sometimes led to believe, a financial plan will. Know where you are, know where you are going.

We talk to all sorts of people in all different circumstances. Our first meeting is on us, so costs you nothing and can be online or in your home (in Surrey). Even if you have little assets in place, we would enjoy a chat with you so please contact us by phone, email or drop me a message, we’ll take a few details and we will arrange a suitable time for the meeting. There is no obligation for you to proceed, so we may only meet the once if we don’t feel the service will benefit you!

This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances. The value of pensions and any income from them can fall as well as rise. You may not get back the full amount invested.