To consolidate or not to consolidate? That is your pension question.

To consolidate or not to consolidate? That is your pension question. 

For some years now, it has been increasingly rare for people to spend their working lives with just one employer. People tend to move company and make career changes and women often take time out to have, and look, after children. 

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This means it's perfectly normal, when approaching retirement age and starting to plan for life after work, for people to find that they have perhaps two or three separate pension pots, from times with different employers, which will be with different funds and of different kinds. The question everybody faces is: should all these pensions be consolidated into one, or left separate?

There’s no single right or wrong answer. It will depend on individual circumstances and the nature of your pension funds. You should always seek professional advice on this.

In favour of consolidating:

  • It's much easier to control your investments in one pot, using a modern platform (if appropriate)  with a much greater range of investments. It can potentially allow you to run a more sophisticated and better performing portfolio, which is easily managed in which you can better control your income. 
  • Costs may be lower with all your funds in one pot. You may find that you save on fixed charges levied by a number of different providers.
  • Your estate will be tidier, making it much easier for your beneficiaries to inherit if your funds are in a single neat money management system, rather than being scattered. 

On the other hand:

  • There is likely to be an initial cost involved in transferring your funds, which will come out of your pension pot. You have to decide whether you are willing to take a step back in order to move forwards. 
  • There may be other penalties for leaving a scheme or you may be giving up a bonus which you would have qualified for had you stayed. An adviser will look out for these and advise you accordingly. 
  • There's a danger of losing out on other benefits such as safeguard on benefits, guaranteed annuity rates and elements that can't be replaced. Some plans, such as occupational money purchase schemes, are likely to have lower costs and you need to consider the lower costs versus the benefits transfer. Again, an adviser will look out for these and advise you appropriately. 

Consolidating pensions can potentially provide some great outcomes in terms of planning and controlling your retirement outcomes. It's one of the first things you should consider when formulating your retirement strategy, but make sure you seek out proper, qualified advice. 


It is important that no actions should be taken without first taking advice. Personal circumstances and an individual's appetite for risk means that the advice for one person may not be the same for everyone. The information in this blog or any response to comments should not be regarded as financial advice. Reeves do not advise on Defined Benefit pension schemes. Reeves do introduce a third party specialists in areas of work we do not cover. 

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About the Author

By Nigel Reeves: My mission is to provide the quality, honest & jargon-free pension advice that people need to secure the retirement they deserve. At home, I'm a family man and an active supporter of grassroots sports!

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