What You Need To Consider When Combining Pensions

If you have multiple pension plans, then it can be difficult to determine exactly what you’re dealing with.

You might be considering some form of pension consolidation to make this process a little easier, but it’s definitely worth weighing the pros and cons of this before diving in. In most cases, you’ll be eligible to move your pension savings from one plan over to another. This makes it easier to manage and track your pension, but it isn’t always suitable.

In this article, we’ll take a look at what you need to consider when combining pensions so that you make the best decision for your circumstances.

The Benefits Of Combining Pensions

Below are some of the benefits associated with combining your pensions:

Extra Flexibility

Most modern pension plans are quite flexible and offer a number of added benefits that aren’t available in older pension plans. Flexible drawdown of your pension pot, or unlocking the income for your family if you pass away, are two notable examples. If you value these benefits, then it might be a good idea to switch over to a new pension plan.

Less Administration

Juggling lots of different pensions usually means you’ll be dealing with more paperwork. So when you need to amend your details, such as with a change of address or telephone number, you need to contact each pension provider individually. Combining pensions helps eliminate this chore as it brings all of your pensions under one roof.

Lower Fees

All pensions come with their own fees and charges, so if you combine your pensions, you only pay a single charge. A good place to start to find out if this works for you is to contact your pension provider directly, or you can take a look at what your pension statements say.

Should I Combine My Pensions?

Although, for the most part, combining pensions works out in your favour, there are situations where it isn’t in your best interests. Some of your older pension plans might come with specific benefits or guarantees that you’d have to give up if you switched over to a new pension. In some other cases, older pensions provide more valuable guaranteed annuity rates, so again, it might not help you to switch over in these circumstances.

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To ensure you find the best outcome for your situation, speak with your pension providers to learn about what your pensions entail. It isn’t a guarantee that combining your pensions will result in more money.

So, if you're still asking yourself, 'Can I combine all my pensions?', consider speaking with a financial adviser who can help you.

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