Around 50%of women in the UK in their 50s currently have a workplace pension, while nearly a quarter of women have a private pension. Have you kept track of all your pensions?
Having a job for life is a thing of the past. Today’s modern flexible working environment means that a you may work for many employers over their lifetime; that means you are likely to have different pensions scattered around that you might even lose track of. According to research by Prudential one in 6 workers have lost track of a company pension scheme; which is an awful waste of money.
The convenience of keeping all your pensions in one place means that you can track their performance more easily and probably save on charges. There are plenty of low-cost pension providers around. However, before you continue, there are 3 points you might want to consider.
Defined benefits schemes
The case for transferring out of a defined benefit or final salary scheme is an extremely delicate and complex decision. Basically, it involves giving up benefits that are visible into the future in return for a cash sum now, where you have no idea how that cash will perform when it is re-invested.
Other benefits embedded in a pension
Your existing pensions may have valuable features like death benefits or Guaranteed Annuity Rate, which you will lose if you switched to another provider.
Exit penalties
Some pensions carry an exit penalty if you transfer out early. You should evaluate whether it is worth paying these sums to make your pension arrangements more streamlined.
With these considerations in mind, it may make sense to consolidate, but not without seeking suitable advice first from a FCA regulated financial adviser. Remember pension consolidation is a more important consideration than combining your broadband and TV subscriptions; or gas and electricity!