Why consolidate — and why be careful
Combining old pensions can reduce fees, simplify management and give you a clearer picture of your retirement savings. But some older pensions have valuable guarantees you'd lose by transferring, so the best approach is to check carefully before moving anything. Consolidation suits many people — but not all pots.
1. Consolidating into a modern personal pension
Moving old pots into one straightforward, low-cost personal pension. Best for those who want simplicity and lower charges without managing investments themselves.
2. Consolidating into a SIPP
Bringing pots into a self-invested personal pension for control and wider investment choice. Best for confident investors who want to manage their retirement savings actively and access more options.
3. Consolidating into your current workplace scheme
If you have a good workplace pension, you may be able to transfer old pots into it. Best when your current scheme is low-cost and well-run — keeping everything in one familiar place.
4. What to check before transferring
- Guaranteed annuity rates or guaranteed growth — valuable and lost on transfer
- Exit fees on older pensions
- Defined benefit (final salary) pensions — rarely transfer; specialist advice is required
- Loss of benefits like protected pension ages or tax-free cash
5. When not to consolidate
If a pot has valuable guarantees, high exit penalties, or is a defined benefit scheme, it's often best left where it is. Best to get advice before moving anything with special features — the wrong transfer can cost far more than the fees you'd save.
How to consolidate well
A qualified pension adviser can review your pots, identify any valuable guarantees, and recommend whether and how to consolidate. Find a pension adviser through Nesto — free, no obligation.
Frequently asked questions
Is it a good idea to combine pensions?
Often yes — it cuts fees and simplifies management. But check for valuable guarantees or exit penalties first.
Should I consolidate a final salary pension?
Rarely — defined benefit pensions offer guaranteed income that's usually best kept. Transferring requires specialist regulated advice.
Will I pay to transfer?
Some older pensions charge exit fees. Weigh these against the ongoing savings from lower charges.
What might I lose by transferring?
Guaranteed annuity rates, protected tax-free cash or protected pension ages — all valuable and often irreplaceable. Check before moving.
How do I find my old pensions?
The government's Pension Tracing Service can help locate lost pots, which an adviser can then review.