Should I Consolidate My Pensions?

Matt Greer

Transferring all your pensions into one place can save you money, time and paperwork but there are some things to consider before starting. Hopefully, this short blog will give you a greater idea of whether consolidation is right for you.

Multiple Pensions

If you are like most people, you will have picked up a few different pensions throughout your working life. A client I was working with even had as many as 12!

Having pensions all over the place can make it difficult to keep track of how they are performing and how much you are paying in charges.

Pension consolidation can save you time and money and can be particularly useful if you are planning on retiring soon. Many older-style pensions do not allow you to take money out as and when you need it and you might find that you have to transfer the pension to get access to the money in the way that you want.

Here four reasons why you should consolidate your pensions

1. Easier to keep track of

Keeping track of your pensions isn’t easy if you have multiple providers all with different statement dates and each with their own online logins. By combining the pensions into one you can easily keep track of your pension and don’t need to go around the houses to see what the value of your retirement pot is.

2. You may be able to save money

There is a good chance if you have older-style pensions that you may be able to save some money. Some older pensions come with very high charges which compound over time and can erode the value of your pension over time.

3. Investment performance

Some pensions have a very limited list of investments that you can use and sometimes this can hinder the performance. Meanwhile, newer-style pensions provide access to thousands of different investments. By consolidating you can have more choice and flexibility to choose an investment strategy that’s right for you.

4. More flexibility in retirement

As mentioned above, some older pensions lack the flexibility that newer pensions have when it comes to taking money out.

Newer pensions tend to offer flexible drawdown which enables you to take money out as and when you need it.

Why not to consolidate

Although there are clear benefits to combining your pensions, it isn’t for everyone. There are some cases where you will be better off sticking with your current plans:

1. You have a defined benefit pension

If you have a defined benefit pension then consolidating your pension isn’t likely to be the right thing for you.

These pensions provide a guaranteed income for life and this income also tends to rise with inflation and provide a dependents pension to your spouse should you pass away. These very valuable benefits would be lost if you transferred.

2. Other guarantees

Some older pensions also come with valuable guarantees which would be lost on transfer. An example of this is that your pension may have a higher than usual entitlement to tax-free cash. Newer pensions have maximum tax-free cash of 25% whereas legacy pensions could include a higher proportion of tax-free cash than this.

It is best to check with your pension provider if you have any safeguarded or guaranteed benefits that would be lost if you transferred.

3. Your pension receives employer contributions

If you are employed then the chances are that both you and your employer pay into your workplace pension. This is free money that would be lost if you chose to leave the workplace scheme.

Rather than transfer this elsewhere it might be worth considering consolidating your pensions into the one that is currently receiving contributions.

4. You will pay an exit fee

Some providers charge an exit fee to transfer your pension away which could reduce the benefits of transferring.

How to consolidate pensions?

If you are looking to combine your pensions you can often do this yourself by contacting the pension providers.

Alternatively, you can work with a financial planner to do this for you. Before consolidating your pensions a financial planner will provide a full review of each of the pensions making sure that consolidating is the right thing to do for you.

If you would like advice on your pensions please get in touch and I would be happy to see if I could help.


Our reputation


I have peace of mind that we are on track to achieving what we want out of life. I feel we have our finances in order now and we are really making the most of what we have.

Ian & Nicola – Deputy CEO and Designer


The process gave us tremendous peace of mind - knowing we have financial security and that any necessary advice and decisions are taken with the help of a professional.

Robert & Pauline, retired


Through the use of cashflow planning I have been able to get a greater handle on my income and expenditure and Paul is able to show me that I am on track to achieving my goals

Louise, Cosmetic Dentist


We meet twice a year, but Darren is always on hand should I have any “financial ideas”, queries or problems. If it is not in his expertise, he has no hesitation in bringing in one of his considerably gifted team.

Gareth and Heather, run a successful fashion business


It is great to have an expert look after my finances and it gives me peace of mind to know that my retirement fund is being well looked after

Terry, Golf course manager


We have been very impressed with Michael’s honest and personable approach to dealing with our finances and he has always gone out of his way to make sure we were happy.

Vincent and Mary O’Connell, run a successful furniture business