If you’ve had more than one job during your working life, it’s likely that you may have paid into more than one defined contribution pension scheme. If you’ve got several different pots, it may be worth combining them as you near the date when you want to start to drawing retirement benefits.
If you’ve accumulated numerous workplace pensions over the years from different employers, it can be difficult to keep track of how they are performing. It’s not uncommon for people to have 6 or 7 different pensions these days. There is a danger that long-forgotten plans will end up festering in expensive, poorly performing funds, and the paperwork alone can be enough to put you off becoming more proactive. A pension transfer could see you moving your money to a new home with another provider.
The main reasons to switch will be to reduce the charges on your scheme, particularly if you’ve an older plan with high fees, or to access different investment options. Older pensions can contain ‘exit penalties’. If there are any exit penalties on your existing policy, they could cancel out the benefit of transferring to a new provider. The other main strategy is to consolidate all your retirement savings in one place, perhaps for similar reasons. So, is transferring everything into one easy-to-manage pension the way to go.