Under the Pensions Act 2008, every UK employer must enrol eligible staff in a workplace pension and pay contributions of at least 3%. So, if you’ve changed employers more than a couple of times throughout your career, it can be tricky to keep on top of what money you have saved up for your retirement.
In addition, you might have also opened a personal pension plan for yourself, especially if you have been self-employed, or you might just want to transfer to a better pension scheme. This means you could end up with different pension pots from various providers.
At some point, you’ll have to decide to either consolidate your pensions or leave them separate, so you may as well think well ahead of retirement. Luckily, this simple guide to consolidating your old workplace pension plans should be of some help.
What Is Pension Consolidation?
Pension consolidation is when you combine all or some of your pension pots together so that they are in one plan with one provider.
However, not all pension plans can or should be transferred. This depends on many factors, including what type of pension plans you have, how much they are worth, how well they are managed, and whether they have any special guarantees attached.
What Are The Benefits Of Pension Consolidation?
Your pension pot is likely to be the biggest financial asset you’ll ever have and the key to enjoying your golden years, so it’s important to consider whether consolidation is the right step for you.
Consolidating your pension pots can offer significant benefits that allow you to:
- Save money on fees: Every pension plan has its own set of fees. So, you may find that you can save some money by only having one set of fees and choosing the provider with the lowest fees. Start by contacting your pension providers or checking your previous statements to see what fees you’re paying.
- Achieve better growth: Consolidating all your pensions into one plan could help you achieve better growth rates because you’ll be able to access a broader range of investment funds.
- Conveniently track your savings: Managing one pension pot is much easier than handling several and remembering multiple logins.
How Can I Consolidate My Pensions?
You can usually consolidate your pensions using your provider’s online transfer service. As these are non-advised services, you are responsible for making sure that this is the right thing for you to do.
What Details Do I Need To Consolidate My Pensions?
Your old plan numbers
Your pension number, sometimes known as a customer number, policy number, reference number, or employer pension scheme reference number, is the unique number given by your provider when you join a new pension scheme. It is used to keep track of your pension plan.
Each pension you have will come with its own unique pension number, which you can usually find at the top of your paperwork or in emails from your provider. If you can’t find your pension number, you should contact your provider for assistance.
In addition, if you need to know who your previous providers are, you can find them using the Government’s Free Pension Tracing Service.
Pension transfer value
Your pension transfer value is the amount you have in your pot that will be transferred from your old pension to your new plan. You can check the amount of money in your old pensions by using your provider’s online service or contacting your provider directly.
Your personal details
When you begin to transfer your pension, you’ll be asked to input your name, contact number or email, postal address, date of birth, and your National Insurance (NI) number. Some providers may request more details, so make sure you have all the supporting documents ready to hand.
Are You Ready To Consolidate Your Old Workplace Pension Plans?
There is no right or wrong answer about whether or not you should consolidate all your old workplace pensions, but if you have decided to do so, you should seek professional advice. Your advisor will give you clear and unbiased guidance on pension transferring based on what you want when you retire.