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Navigating multiple pensions

Simplifying financial management, lowering charges and increasing future funds

You may have worked with several employers throughout your career, accumulating multiple pension plans. This can also apply if you’ve been self-employed or a contractor, resulting in personal pensions.

While multiple pensions can be administratively challenging to manage, they could also be financially draining due to high fees or subpar investment performance. What is a potential solution? Pension consolidation.

This strategy can simplify financial management, lower charges and increase future funds. However, it has potential pitfalls, so seeking professional financial advice is crucial. Let’s delve into pension consolidation and what needs to be considered.

The upside of pension consolidation

Managing multiple pensions can be a daunting task. Imagine tracking the investment performance, charges and annual statements for five different pensions. This can be overwhelming and time-consuming for many. Therefore, transferring pensions to a single provider can significantly simplify your financial administration.

Moreover, you’re likely paying administrative fees for each pension. This might not be the most cost-effective approach, especially when dealing with providers who have outdated and uncompetitive charging structures. These fees can affect your investment returns, eventually reducing your retirement funds. By consolidating your pensions, you could save on these charges.

However, pay attention to the performance of each pension fund while focusing on fees. Some of your pensions might be underperforming, and shifting to a different scheme could offer better growth potential.

Assessing charges and performance is more complicated, so we’re here to help. We can thoroughly evaluate your pensions and guide you on the best course of action.

Potential pitfalls of pension consolidation

Consolidating your pensions may have downsides if it means giving up valuable benefits and guarantees. Here are some key features you should consider. One of the most significant risks associated with pension consolidation is the potential loss of defined benefits. These benefits often come with older pension schemes, including guaranteed annuity rates and spouse or dependents’ pensions. Consolidating pensions could mean giving up these benefits, potentially resulting in lower income during retirement.

Before consolidating, checking whether your existing pensions carry exit fees is crucial. These charges can sometimes outweigh the benefits of consolidating, particularly if they are substantial.

Additionally, while having all your pensions in one place might make them easier to manage, it could also lead to a need for more diversification. If all your pension savings are invested in the same funds, you could put your retirement savings at a higher risk.

Securing a more comfortable future for you and your family

The funds you’ve accumulated over the years could be substantial, and a simple decision could jeopardise your future financial security. Conversely, making the right decision could secure a more comfortable future for you and your family. We’re here to guide you, ensuring you make informed decisions with your money.

Do you require further information or wish to discuss your options?

Recognising these benefits and guarantees can be challenging, so having your pension plans reviewed by a professional financial adviser is crucial. The decision to consolidate your pensions should not be taken lightly. Please don’t hesitate to contact us if you require further information or wish to discuss your options. Your financial future is our priority.

THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE). 

THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE. 

YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.

Adam Reeves

Author: Adam Reeves

DipPFS Cert CII (MP&ER)
Independent Financial Planner, Wealth Manager, Director

Last updated on

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Adam was quick to assess & understand my situation, and was able to discuss & communicate in a very concise and simple way the various options available to me, taking time for me to understand and clarify where necessary. My understanding & knowledge of taxation & pensions has increased significantly allowing me to feel much happier making financial decisions for the future.

Rob – West Sussex

Adam and his team undertook in-depth research into our existing QROPS schemes and clearly set out both pros and cons of transferring the funds back to the UK. Having decided to go ahead with the transfer, Adam and his team worked extremely hard to facilitate the transfer. The QROPS pension trustees were not always the most professional or responsive organisation – however we were very grateful for the perseverance and commitment that Adam showed us as clients.

Jonathan – East Sussex

Adam offered a range of financial products , the one he suggested was affordable and proved to be a good choice.  Returns on investments have exceeded my expectations, based on Adam’s advice and guidance. Profits have enabled house improvements to take place.

David - Surrey

Adam arranged an appointment very timely, he explained his role and qualifications as an IFA giving me reassurance , we went through my retirement and investment goals. Adam discussed my options explaining in great detail, I felt relaxed during our discussions allowing me to fully understand my choices. I feel very confident in the financial advice allowing me to enjoy my retirement.

I was very happy with Adam’s recommendations and explanations of financial products which would suit my retirement goals, I feel this has helped me review and reduce my financial risk as I reach retirement, leaving me feeling confident that I can enjoy my retirement plans.

Ron – West Sussex

After initial meeting Adam put together a very detailed and thorough written plan. At our second meeting he went through the whole booklet and explained everything in layman’s terms which made it a lot easier to understand.

I am very happy with everything that was suggested and put in place especially with something as big and important as pensions. Adam and his team have taken a huge weight off my shoulders and I would highly recommend their services to anyone needing help with their financial planning and pension.  Adam couldn’t have been more helpful, and even came outside his normal area to meet me on a number of occasions.

Richard - Kent

Unfortunately I had to claim on my critical illness insurance due to my wife being ill and because of the sound advice Adam gave in acquiring this insurance we ended up being financially safe through a tough time.

Steve - Kent

Adam did a review of our financial situation, confirmed that Flexible Drawdown best suited our needs as a family, and then did all the research into the best product for us. He will continue to monitor it for me. He acted extremely promptly because we had a deadline for requiring the lump sum; went out of his way arranging meetings during non-office hours, was professional yet friendly and explained a difficult subject very well.

Clare – East Sussex

Adam did a thorough review of my pension policies, clearly explained how well they had performed, how flexible they were, how the market regulation has changed, and, crucially, what the tax implications would be if I were to leave them untouched. He accurately assessed my attitude to risk and recommended an up-to-date solution that will offer me the greatest flexibility at retirement.

Greg – East Sussex
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