💬 'I'm in my mid-40s and have moved jobs fairly regularly. This now means I have eight pension pots, some with as little as £1,000 in. Will this pose an administrative nightmare when I retire? Should I combine them into one?’' ⬇️ An expert responds:
There are plenty of reasons why combining your pensions with a single provider can be a good idea. Most obviously, a single retirement pot is much easier to track and manage than having various pensions with different providers.
The impact of reducing your pension charges can be significant, particularly over the long-term. Take, for example, two people, Gemma and Chris, who each contribute £2,000 per year to their pension and enjoy 5 per cent investment returns before charges are accounted for. However, while Gemma pays just 0.5 per cent in charges, Chris pays 1 per cent.
If you do decide to consolidate with a single provider, assuming these are ‘defined contribution’ pensions – where you build up a pot of money which you can access from age 55 – the process should be relatively simple. Note that the minimum age you can access your pension is set to rise to 57 in 2028.
You’ll just need to choose a provider with whom you want to consolidate your pensions and get the details of the pension or pensions you want to transfer over. Once you’ve given the relevant details to your new provider, they should do all the legwork for you.
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