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Should you consolidate your pensions?

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AR011097 06/2018

A generation ago, it made good financial sense to have more than one pension.

Most pensions were invested in with profits or managed funds. The performance depended on how well that particular provider invested your money, how financially strong they were, and how the returns were distributed amongst different groups of customers.

As it was impossible to say how well each provider would do in advance, spreading your regular or lump sum investments between several companies reduced the risk of having all your savings with the company that, in hindsight, produced the lowest returns.

Today’s pensions and savings plans are different. You can choose a wide range of investments within one pension or savings plan, which means that you don’t usually need more than one. When you take out a modern pension like a self-invested personal pension, you are only paying the pension provider to carry out administration. You might also choose to invest in funds managed by the same provider, but you can also choose from (usually) thousands of other funds available from other fund managers.

Rather than putting all your eggs in one basket, you can now ‘spread your eggs’ within a single pension plan. So, if you’ve got a few pensions, you could think about bringing them together.

There’s lots to consider, when it comes to thinking about consolidating your pensions. What are the advantages and disadvantages of consolidating? What should you look out for when choosing a new home for your retirement fund? Are there pensions you should leave where they are? And, if you do decide this is right for you, how do you go about consolidating?

And, if you are unsure what to do, you can always consider taking regulated advice. 

More employers means more pensions

Since the demise of defined benefit pensions in the private sector, most of us who have a workplace pension have a defined contribution pension.

Modern workplaces also mean that most of us no longer work for the same employer for the whole of our working life – Brits can now expect to work for an average of six employers over the course of their career. Workers who earn £10,000 a year or more are now being automatically enrolled into pension saving from the age of 22. This is likely to mean that most full-time employees accumulate five or six pensions along the way.  


Using your pension money

Retirement on the horizon? Find out what your options are.

My Retirement Planner

Use our tool to find out what your pension might be worth when you retire.


Already have a pension with Aviva? Monitor it online at the touch of a button with MyAviva.

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