When considering a pension transfer, there may be a thousand questions running through your mind that you want to ask a pension advisor. As experts in pension transfers, we manage and transfer pensions daily for hundreds of clients. With our Pension Transfer Gold Standard award by the Personal Finance Society, we are ideally placed to answer any queries or concerns.
For most people in their 40s, retirement seems a distant dream, but you may have started to think about your pensions and how much money they have built up.
If you have had a number of different jobs during the course of your working life it is quite probable that you will have acquired a range of smaller personal pension funds. For several reasons, it may be a good idea to merge them into one fund (this is called Pension Consolidation) so that you can keep track of your pension funds and plan for your retirement with greater clarity. If all your pension money is in one fund you will be able to see immediately what your personal pension is worth and to manage your fund to suit your purposes, even while you continue to contribute to the total.
It’s often difficult to keep track of multiple pensions – not only does this stop you from knowing how much your pension pot is worth, but it makes retirement planning more difficult. Here are some tips to make life easier:
Our article a guide to pension consolidation explains the many benefits of merging multiple pensions. As well as ensuring you get the best potential return on your investment, pension consolidation also helps you to avoid hidden charges from your pension provider, that might be losing you money. For the purposes of retirement planning, however, a key benefit of pension consolidation is easier pension management.
The workplace pension is something that many people take for granted. You contribute towards it whenever you are paid, your employer might add their own contributions, and you will also be paying into your state pension. You might even have an additional private pension fund you are paying into. However, this is no guarantee that your pension is growing as you expected it to, especially if you have lost track.
Many people choose to transfer their pensions to a new provider if they are looking for pension consolidation, want more investment choice, or if their current pension fund is not offering the best value for money. Combining all your private pensions into a single pension fund could have several advantages, including being easier to manage and keep track. Modern pensions may also give you more choice of investments, which is potentially useful if you want more control (although remember that investment value can go down as well as up).
Auto-enrolment – when a workplace automatically enrols you in a private pension and it is up to you to opt out if desired – is useful in many ways. For younger workers or those who might have put off setting up a pension fund, it gets people off to a good start when saving for their retirement. However, if you are already paying into a personal pension, this can make retirement planning more complicated.
Many people have a few different pension pots from previous employers, and you may have heard of pension consolidation: putting all your pension plans together in one, single pension fund. For your retirement planning, it’s essential to have an idea of how much income you could expect to receive from your final pension.
Pension consolidation could make this much easier: no-one wants to spend hours trawling through filing cabinets or peering at different websites trying to work out what all your pension funds add up to. It can also reduce the chances of losing track of any old workplace pension pots you may forget about as they are lower in value. When it comes to your retirement fund, every penny counts.
The days of spending your whole career working for one company – and paying into a single pension pot – are over. Auto-enrolment laws mean that many people have a number of smaller workplace pension funds and some larger companies offer defined benefit pensions too. As well as making retirement planning harder, this potentially loses you money. Pension Consolidation might not just make things easier but could be profitable, whether you choose income drawdown or an annuity.
