Pension consolidation

What are the pros of consolidating pensions?

With fewer pensions, you’ll

• Cut down on paperwork and passwords
• Have a far easier time keeping on top of your pension allowances, making sure you’ve used those available to you and haven’t triggered a costly tax bill by breaching any
• Gain much greater visibility over your pension investments, enabling you to maintain a diversified portfolio of high-quality investments, which is the bedrock of successful investing
• Potentially reduce pension fees

What are the cons of consolidating pensions?

Some pension are better left where they are and if that’s the case, we’ll let you know and won’t advise you to consolidate.

• If you have a final salary pension – otherwise known as a defined benefit pension – it rarely makes sense to move it. These pensions usually come with benefits that you’re likely to lose if you transfer. It is mandatory to seek professional advice before transferring a final salary pension
• Some other pensions – particularly older ones - also have benefits that are lost on transfer, for example protected tax-free cash or guaranteed annuity rates. Your adviser will check whether you will lose any valuable benefits or features from your existing pension plan, or incur any penalties on your existing pension if you transfer, and advise accordingly
• New arrangements may be more expensive so your adviser will also look at the charges on current plans as part of the advice process