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Should you Consolidate your Pensions?

If you are over the age of 50 in the UK, then you have already had a long and arduous working life and along the way, you have probably had several jobs. Along with these jobs came pensions but have you kept track of them over the years?

We no longer live in a world where people have a job for life and that means that people take a more open or flexible approach to work. So, having pensions that are scattered around can prove difficult to manage and research proves that one in six workers have lost track of a company pension scheme. This means that you should really consider the convenience that comes with having all of your pensions in the same place as it will make it possible for you to track the way in which they perform while saving on any charges that you might be susceptible to. So, whether you are want to start managing your money better in preparation for when you retire, or you are simply moving abroad to start a new life, there are some things you need to consider before making your final decision.

Defined benefits scheme

It is a complex decision to make should you decide to transfer out of a defined benefit or final salary scheme. Essentially, this will mean that you will have to forfeit any benefits that are visible well into the future and in return, you will be given a cash sum now. At this point, you will have no idea how well that cash will perform when it is reinvested.

You could lose benefits that come with a pension

Your current pensions might have features that prove to be valuable such as death benefit or even a Guaranteed Annuity Rate, all of which will be lost if you made the decision to move to another provider.

There could be penalties

There are some pensions that come with an exit penalty should you choose to transfer out earlier than expected. At this point, you should consider whether the fees are worth paying just to make your pensions more streamlined and manageable.

These are serious considerations that you need to make but it still could be wise to consolidate your pension. Whatever you might be considering, it is always wise to seek advice first because consolidating your pension is a very brave move.

 

 

Lewis Samuel / CI-ASSOCIATES

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