Consolidating Your Pension Pot
Like many people you may have considered moving or consolidation your pensions to another scheme or provider to achieve better fund performance, lower charges, improve death benefits, increase flexibility for taking the benefits, or simply because you are changing jobs.
Most pension schemes will allow you to move your pension pot to another pension scheme, which may be a new employer’s workplace pension scheme, a personal pension scheme, a self-invested personal pension (SIPP) or a stakeholder pension (SHP) scheme.
With most pension schemes, you can choose to move or consolidate your pension at any time up to a year before the date you are expected to start drawing retirement benefits (in the case of transferring a defined benefit occupational pension scheme) and, in some instances, it is possible to move to a new provider after you have started to draw retirement benefits.
At Castlegate, as an experienced independent and Chartered financial adviser in Boston and across the East Midlands, we work with our clients to support and advise them with all aspects of pension planning including consolidating their pension pots. If you are considering consolidating your pensions, we recommend that you seek independent financial advice prior to making any changes.
New Job, New Scheme
When you leave one job to move to another you are treated as leaving the workplace pension scheme, but you do not lose the benefits that you have accrued. When changing employers, you may decide you want to consolidate your pensions to the scheme offered by your new employer, though it is imperative that this decision is made for financial reasons and not for emotional reasons.
During their working lives and as they change jobs, people can accumulate a number of small pensions – making it hard to determine how much your total pensions are worth. This is another circumstance where someone may want to tidy up and simplify their finances by consolidating their pensions into one pot.
Seeking the advice of a financial adviser can help you to understand the financial benefits of consolidation your pension pots when changing jobs. As a financial adviser in Boston we regularly work with our clients to ensure they are making the best decisions for their individual circumstances.
Another reason for moving or consolidating your pension pot maybe to improve the performance of your pension. If your pension is in an underperforming scheme you may want to consider moving it to another provider. It is imperative to mention that there are no guarantees in relation to the performance of any new scheme or any underlying investment solutions, so you need to consider the risks and decide whether moving your funds is a viable and appropriate option.
Pensions – Old vs. New
Depending on when you took your pension out, many of the benefits of modern pensions may outweigh those of older pensions, such as death benefits. If you feel you will gain better benefits from moving your pension to another scheme, speak to a financial adviser before making any changes to ensure you are making the right decision.
There are a number of different reasons as to why you may want to consolidate your pension pot. Make sure you understand the implications of doing so by seeking expert independent financial advice from expert, specialist advisers. As a financial adviser in Boston we can advise and support you with all aspects of pensions and retirement planning.
If you are looking for a financial adviser in Boston, please do not hesitate to get in touch to talk about the most appropriate investments products for your personal circumstances, investment risk tolerance and financial objectives.