Merging pensions

[rainbowbreeze123]

Ive got several pensions as ive had a few jobs and was wondering whether to merger them, does anyone have any advice or websites I can look at for advice ?

Ive tried looking into it but apart from finding out whether there are any transfer fees or loss of benefits with transferring I cant see whether its a good fathom if its a good thing to do or not. I just thought it made sense to have 1 rather than 6 I think I have now !

It depends what benefits you have with various pensions, and charges (if any). Also, you can only merge pensions at certain points, so it may not be straightforward

I have a number of pensions from different employers, and have made the decision to keep them separate as I could do a staged retirement - e.g. start drawing one from an early age, but not draw from others until later. Also, they all offer slightly different benefits, so useful to have a mix

Ah ok thanks for the input I hadnt thought of it that way

Doris makes an interesting point... but 6 pensions is a lot to manage... although in a few years the government may force providers to let you see all your pensions at once, with potentially more functionality on the way... ?

Maybe consider merging any with small transfer fees that aren't performing very well?

Keep contributing to a pension...

Rainbow, do they all pay out at the same time? I have one that I should have transferred within two years to a different scheme, but didn't get round to it.

I noticed then that it pays out at 60 and my current one at 65. I may wish to defer payments for both of them, but it's nice to have the option of an earlier income top-up if needed.

Ill check re the payout age on them, good point. To be honest there isnt a great deal in most of them as ive had jobs for say a year and had a new pension setup so probably not worth keeping those might as well merge them. 6 is a lot to manage I think !

I was advised not to merge pensions. It was to do with the fact they were final salary pensions.

If you can afford for some professional advice I would do that. Our FI went through all my pensions and recommended which to merge and which to leave. The things to consider were not just how they were performing but the fees.

If you have a small pot and small % fee you would be better of than a fixed fee as it may actually not be going up each year iyswim

If any of the six pensions are 'Defined Benefit' pension schemes (so salary related), versus the more normal ‘Defined Contribution’ schemes nowadays, it will become more complicated valuing those salary related benefits.

FYI although it don’t sound as if you are retiring anytime soon, a Defined Benefit (salary related) scheme in this current very low interest rate environment, can be worth its weight in gold, and as the link I provided says, it is rarely worth transferring that out, versus the other Defined Contribution (also known as a Money Purchase pension) where you are at the mercy of market volatility and below average performance fund managers. Boo hiss

As a slightly higher transfer fee could result in enhanced returns every year until you draw your pension (or not), it is well worth getting advice, as some fund mangers running your pensions could also be too conservative with your risk profile if many years to go, and could have been in safe but very low yielding government bonds etc for years once you left.

Its your money and making informed decisions now, could make a difference to your pension pot in the years to come.

There are 7, seven, yes Seven, types of pension. Pretty much all that is written above is misleading to some or all of those types of contracts.

If the value of these pensions is >80k (value, not income) get advice.

There are no websites I'm afraid. It's a job for an IFA.

As a rule -

• Defined benefit schemes - where you get a percentage of a salary (final or career average or something else) = leave alone
• Defined contribution schemes - where you have money in a pot invested in some financial assets, usually "unit trusts", merge into the lowest cost provider's scheme.

It is more complex where retirement dates differ for Defined contribution schemes but it shouldn't really matter that much as the date is a notional one anyway - there is a minimum age defined but not maximum.

Check the fees and dates and types. Merge high fee later retirement DC schemes into the lowest fee scheme you can access. Note that older schemes in which you are a deferred member won't take transfers in usually.

there is a minimum age defined but not maximum

utter, utter rubbish. The law stipulates the minimum age, currently 55. The maximum is also stipulated by law at 75. All Money Purchase schemes can work in this way.

^^ perfect example of why professional advice from someone who actually knows the real rules is essential.

poster dontcallmethatyoucunt Thanks for clarifying and pointing out that you are clearly one touchy individual given the abusive username. The max age is all but irrelevant for everyone as they will need the money before 75. Useless accuracy but thanks for helping out. :-)

wisedad I think the self promotion of your name is inaccurate, but hey ho.

You were wrong, ill informed and misleading, but if being 'nice' is your bag, go for it.. I'd rather be right.