What do you do with multiple pensions?

If you are thinking about retirement in the future and have had more than one job, there is a good chance that you have more than one pension, possibly several, all of which will give you different returns. What does your mix of different pension schemes mean to you? Do you worry that each little part won’t amount to much – or is it the more the merrier for you, as each offers something extra?

The Government says around 50,000 small pension pots are created each year and that someone retiring in 2050, who had 11 jobs over their lifetime, will have saved in around four or five separate schemes*. Is that a good thing? Or would you be better consolidating all of your retirement nest eggs into one? It’s possible that you might get a better retirement deal financially by combining them – but there are costs to making that change, and each pension might offer different benefits to you.

If you’re looking at your retirement nest egg now, what do you do?
We asked our trusted partner Wren Sterling to give advice on whether to combine multiple pension pots. 

“We’d need to sit down, have a chat about what you have already, your goals and your retirement plans,” says Barrie Storm, from Wren Sterling.

Barrie's tip: Start with a blank piece of paper. With your adviser work out what looks good for your retirement, what is in place and whether it matches your goals.

“It often doesn’t,” he says. "You need to establish what you are trying to achieve rather than what you’ve got." 

Arm yourself with the facts
Many people who invest through company schemes will have been given a range of choice, risk and result for their investment - and some people may have significant amounts saved in a number of different or outdated pots. Of course, you should seek advice by an independent financial adviser to understand your options at retirement. 

Is it best to consolidate pensions?
If you have a pension which is a defined benefit pension scheme or if the particular scheme offers Guaranteed Annuity Rates and also if your scheme will charge you for moving your funds out of your pension it can be a better idea to leave your pensions where they are. But it can be easier and simpler to see all of the funds you have in one pot which is easier to keep track of as you could receive just one statement going forward. You could be transferring out of a higher-cost scheme into a lower-cost one which eventually will mean that your pension is worth more. Multiple schemes could mean paying multiple fees. 

These are the sort of things that a financial adviser will help you to discover - they will take into account what kind of pensions you have and how far away from retirement you are. 

Barrie's tip: Be aware of all the guaranteed benefits before moving anything. Your financial adviser will make checks to see if there’s a risk of any valuable guarantees or rights being given up, like whether there are defined benefits in a final salary scheme, for example. 

It's very important to review your pension situation regularly and to keep documents related to your schemes safely together. 

Barrie's tip: "You'll need to get hold of up-to-date documents from each provider and get an adviser to decipher it with you."

Do you need to trace a lost pension? We have all the steps that you need to take to track down a lost pension

If you feel like pension consolidation is something that you would be interested in talking to an expert about, our financial advice partner Wren Sterling are there to help on your doorstep at one of our 60+ branches. 

As a qualifying** member of The Nottingham you will have access to a no obligation first appointment with a Wren Sterling adviser with no fee to pay for you, the customer. You will receive exclusive access to independent and personal financial advice from Wren Sterling who are regulated by the Financial Conduct Authority (FCA) Wren Sterling can recommend the best products to suit your needs.


*DWP report on workplace pensions 

**If you have a savings balance of at least £500 and have either held one of our savings accounts for at least the last 12 months or currently have a Nottingham Building Society mortgage, you can benefit from a range of offers. Visit your nearest branch or call us on 0344 481 0912 to find out more. 

Nottingham Building Society, Nottingham House, 3 Fulforth Street, Nottingham NG1 3DL, is an introducer to Wren Sterling for Financial planning, including investments, pensions and protection. Wren Sterling is a trading name of Wren Sterling Financial Planning Ltd, which is authorised and regulated by the Financial Conduct Authority; registered No. 665653. 13-19 Derby Road, Nottingham, NG1 5AA. Registered in England No. 09157918.

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