Pension Consolidation

One of the main reasons that people consolidate their pensions is for convenience, but there are other things to consider too.

Investment performance

• Investment performance in your current pension plan may be poor.
• The options for switching within the existing fund range might be limited or unsuitable.
• If you’ve got several plans with no overall investment strategy, you might find the funds you’ve invested in are unsuitable or don’t perform well. Please bear in mind that there’s no guarantee that performance will be better if you transfer. The value of an investment can fall as well as rise and isn't guaranteed. You may get back less than the amount originally invested.

Lower charges

• The charges on one large consolidated plan could be lower than that of several smaller ones.
• Many older plans have higher charges than more modern plans.
• You’ll need to consider the cost of transferring though. You might be charged a fee, which could be large enough that the transfer can’t be justified, especially if you’re close to retirement.

Flexibility

• Many people want access to more flexible investment options.
• You can do this by transferring to a personal pension that has a self-investment option. Self-investment gives you greater choice, flexibility and control in creating your own pension portfolio. Remember, the value of any investments can go down as well as up, and isn't guaranteed. You may get back less than the amount originally invested.

Moved jobs

• Today’s work patterns mean it’s likely that you’ll build up a number of pension pots.
• Transfers may also be attractive if you’ve contributed to a company pension in the past but no longer do so. You might have moved job and feel cut off from the way your savings are being managed.

Please note that it might not always be in your best interest to transfer a company pension scheme and you should seek financial advice on this matter.