Got Multiple Pensions And Wondering If You Should Combine Them?

If you are fortunate enough to have multiple pensions, combining them can reduce administration and hassle involvement. You might also be able to reduce the amount of fees you pay, which can give your pension a financial boost. 

Another potential benefit of combining your pensions is that it could allow you to get rid of any that aren’t performing particularly well. These stalled or staggering pensions can erode your pension profits, jeopardising your retirement funds. 

How You Might Have Multiple Pensions

Got Multiple Pensions

The most likely explanation for having multiple pensions is as a result of your employment history. For the past few decades, employers have been required to auto-enrol employees into a workplace pension, so long as they are twenty-two or over and earning at least £10,000 per year. 

Therefore, potentially you could have as many workplace pensions as you’ve had jobs over the years. Moreover, because you will have been enrolled automatically into such pensions, you might not be aware of them. As a result, you might have money sitting in pensions that you don’t know about or that you’ve forgotten.

How To Find Out About Missing Pensions

If you think you might have lost or forgotten pensions, you have two options for relocating them. Firstly, you could trace them yourself using the government’s Pension Tracing Service. Secondly, you could use an independent specialist pension tracing company. 

Using the government’s Pension Tracing Service is straightforward, but there are limitations to the amount of information you can get. If you choose to use an independent pension tracing company, you have plenty of options available. However, before you commit to using one, ensure you know what you’re signing up for and the extent of their service. 

Reducing Management Fees By Combining Your Pensions 

Every pension will have management fees. With some pensions, these charges are clear and straightforward. However, other pensions may have a fee structure that is far from transparent. 

You might think that there is not much difference between a pension with annual charges of 0.5% and one with 1.5%. However, because of compound interest growth, this relatively small difference can amount to a significant amount over the duration of your pension. 

Combining your pensions could place all of your funds at the most favourable rate of fees. Moreover, doing so could give your overall retirement funds a significant boost. 

Combining Your Pensions 


With some pensions, you may be able to combine them yourself. However, if you need some help, you can use a pension-combining service from a regulated company. They will gather all the information they need about your multiple funds and switch them into a single personal pension. 

You should be aware that using such a company will enable you to combine your pensions. However, you might not be any better off in terms of pension fees or performance, as the company will merely combine your multiple pots. Therefore, there is a strong argument for using a regulated financial advisor in these circumstances. They will assess all of your funds and advise you on the most beneficial options. 

Using a Financial Advisor to Combine Your Pensions

When you use a financial advisor to combine your pensions, they will look at each of your funds and give you an unbiased assessment. You can then decide whether combining your pensions is the best thing to do. You don’t get this level of insight with a pension-combining company. 

Of course, if you want to combine your pensions merely to cut down on administration, you might be fine using such a company. However, you should consider if this is a prudent move, as you could end up paying more in charges. 

Combining your pensions is an ideal opportunity to get some financial advice at the same time. Research from ILC-UK has shown that people who seek regulated financial advice end up with an average of £30,000 more in their pension pots. 

Can You Combine the State Pension With a Private Pension?

No, you cannot combine the State Pension with any other scheme, as it is a government benefit that you qualify for at a specific age. 

When thinking about your pension, consider speaking to a regulated financial adviser such as Portafina or view the information at The Money Advice Service.

Got Multiple Pensions And Wondering If You Should Combine Them? 1

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