Combining pensions. What you need to consider

MoneyPlus Features Team

When you have several pension pots, things can become complicated. We explain what you need to consider if you are thinking about combining your pension pots into one.

In the UK, research has shown we change jobs on average every five years, which means many of us are likely to end up with quite a few pensions. And that can make it difficult to keep track of things.

Which is why it might make sense to consider combining your pensions together into one plan.

Here are a few things you need to think about, and do bear in mind it’s not right for everyone.

Transferring into one pension cuts the admin

Having one pension cuts your admin, with one set of paperwork and one provider to deal with. And if you manage your pension online, one log-in, plan details and password.

It’s also simpler to keep your nominated beneficiaries up to date – that’s who you’d like to leave your pension savings to when you die.  Your pension isn’t normally covered by your Will so it is important your provider knows your wishes.

You can nominate or update your beneficiaries online with Standard Life. Just log-in and manage your plan, or read more here about passing your pension on.

You can keep track of how much you’ve got

It’s easier to see how much you have in your pension pot and review your investments if you don’t have to manage lots of different pensions.

Watchful eye on charges

Every pension has its own set of charges. You may find that you can save with just one set of fees – but do check.

So if you are considering combining your pensions, how do you go about it?

Step 1: Before doing anything, check what you have

Do you know how many pensions you have and what they offer? Check carefully as they may have benefits and guarantees you would not want to give up. Do they, for example, have particular death benefits or financial guarantees and do they let you take your pension money how and when you want. You can read more about what to check for here.

First things first – ask your pension providers for up-to-date information about what you’ve got.

Step 2: Lost any pensions? Track them down

It’s easy to lose sight of an old pension, especially when you move to a new job. Consider this – there are an estimated 1.6 million lost pension pots worth nearly £20bn in the UK.

If you think yours is one of them, the good news is that there’s plenty you can do to track it down. Try the government’s Pensions Tracing Service or read Billions lying in 'lost' pensions and bank accounts - how to find what's yours.

Step 3: Before you do anything, get some guidance to help you decide

Combining pensions isn’t right for everyone and there’s no guarantee you’d get more as a result, so you need to consider all the facts.

If you have any pension pots worth more than £30,000 you may have to take financial advice – and it’s such an important decision that you may want to take advice even if it’s less. You can find out more from the Pensions Advisory Service.

If you don’t have an adviser, try to find one in your area, visit our website for more on financial advice or get in touch with 1825, Financial Planning from Standard Life*. There will likely be a charge for financial advice.

Step 4: If you choose to go ahead, here’s how to get started

All you need to get started is the name of your provider, pension plan number and an approximate value – you can usually find all these on a recent statement.

If you have a Standard Life pension, the good news is that most of our policies allow you to combine your pensions online or through our Standard Life app.

The app lets you track and manage your pension and make payments on the go, so if you don’t already have it, visit our website to find out more or to register for online services.

The Standard Life app is on the Apple store and Google Play. Find out more here.

* 1825 is a trading name for the Standard Life Aberdeen group’s advice business

A pension is an investment. Its value can do down as well as up and could be worth less than was paid in. The information here is based on our understanding in September 2019 and shouldn’t be taken as financial advice.