I’m 45 years old and have worked in financial services since leaving university two decades ago. I’ve had five different employers and at each one I was offered a company pension.

I have lost track of a couple of the pots. What’s the best way to find them? Also, would it make sense to combine these pots, and if so, what are the risks?

Julia

Tom Selby, AJ Bell Head of Retirement Policy says:

According to some estimates people on average switch employer 11 times during their working life, potentially saving in a new pension scheme each time.

The Pensions Policy Institute, a think-tank, believes the number of ‘deferred’ pensions – that is pensions which have been opened but are no longer being contributed to – will increase to 27 million by 2035.

This trend is expected to be accelerated by reforms which mean employers now need to automatically enrol all eligible staff into a workplace pension scheme.

In terms of finding lost pensions, new Pensions Dashboards are set to be introduced next year which should eventually allow you to see all your retirement pots in one place, online.

Until then, the Government’s Pension Tracing Service is a good starting point when trying to locate missing pensions. 

There are plenty of reasons why combining your pensions with a single provider can be a good idea. Most obviously, a single retirement pot is much easier to track and manage than having various pensions with different providers.

You could also benefit from lower costs and charges, increased income flexibility and more investment choice by switching provider.

Older pension schemes, for example, often charge more than modern pensions, while plenty of workplace schemes don’t offer a full range of retirement income options or restrict your investments to the firm’s own in-house funds.

Before transferring any old pensions, you should check there aren’t any valuable benefits attached which you may lose or exit charges that will be applied. Your provider should be able to tell you if this is the case.

If you do decide to consolidate with a single provider, assuming these are ‘defined contribution’ pensions – where you build up a pot of money which you can access from age 55 – the process should be relatively simple.

If you have a ‘defined benefit’ pension valued at £30,000 or more, you will need to take regulated financial advice before transferring.

You’ll just need to choose a provider with whom you want to consolidate your pensions and get the details of the pension or pensions you want to transfer over. Once you’ve provided the relevant details to your new provider, they should do all the legwork for you.

DO YOU HAVE A QUESTION ON RETIREMENT ISSUES?

Send an email to asktom@sharesmagazine.co.uk with the words ‘Retirement question’ in the subject line. We’ll do our best to respond in a future edition of Shares.

Please note, we only provide information and we do not
provide financial advice. If you’re unsure please consult a suitably qualified financial adviser. We cannot comment on individual investment portfolios.

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