Earlier this year, the Department for Work and Pensions (DWP) launched their pension tracing service, helping individuals trace pensions that they may have invested in, but lost track of. With people now having an average of 11 jobs within their working life, it can be much more difficult to keep track of each of pensions they’ve had at each of their workplaces.
A recent report by the DWP estimated that there could be up to £400 million in lost (or unclaimed) pension savings. This combined with the issues surrounding the lack of funding for retirement makes the statistic even more compelling.
The Pension Tracing Service is a Government initiative, and can be found on the Gov.uk site here: https://www.gov.uk/find-pension-contact-details which allows you to enter your details, and your employers’ details (or pension provider(s)) to begin the tracing process.
Once you’ve found the details of your workplace pensions from your employment history, you are able to bring all of your pensions together – a process known as ‘consolidation’.
If you have more than one pension pot, you might want to consider consolidating all of your pots into one for simplicity. You may also benefit from lower charges by doing this. If appropriate to your particular situation, it may be good not to have ‘all your eggs in the one basket’.
There are times when diversification is an important consideration. It is important to remember that you might not benefit from transferring or switching your pensions all into one place.
Why consider consolidating pensions?
Potential issues with consolidating pension pots
There are advantages to consolidating your pensions, but there are also pitfalls. The most suitable course of action may depend on what kinds of pension you have and how long you have until retirement.
If you’re considering consolidating your pensions, it’s important to weigh up the benefits and drawbacks, and each person’s circumstances are very different. Pensions and tax rules are complex, and normally it is not possible to recover your original pension arrangements if you change your mind. To discuss your situation and ensure that you don’t lose any valuable benefits, please contact Matthew Bromley, Chartered Financial Planner at Cowgill Holloway Wealth Management.
This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.
Disclaimer
The information was correct at time of publishing but may now be out of date.
