Interview with Mark Till - Pension Consolidation
By bringing several pensions together in one place, you may be able to reduce charges, improve on performance, and ultimately have more money in your pension pot for your retirement. Mark Till, Managing Director - Customer Value Management at Aegon explains why
Q: Hi Mark. First thing first, what exactly is pension consolidation?
Mark: During our working life, you may have paid into several pension schemes with various employers and built up several pension pots. Moving all these pots into one is called consolidating. It’s also referred to as combining.
Q: Aegon recently released research that shows that 80% of our customers have more than one pension. Why is it beneficial for customers to consolidate their pensions into a single scheme and what should those customers be aware of?
Mark: We want our customers to enjoy their retirement with the most money available to them. If a customer has several pensions, it is possible that they are paying separate charges on all of them. And obviously, the less they pay in charges, the more money stays in their pension pot. Over time, the difference this could make can be astonishing.
Q: So this is something customers should be considering now?
Mark: The earlier customers have all the facts the better! The longer they leave their pension savings in a scheme with high charges, the more they could eat into their future. If customers aren’t monitoring their investment, they could be leaving their pension savings invested in a poorly performing fund, which will reduce the opportunity for growth. High charges and poor performance are a toxic mix.
Q: So what happens if you are near retirement now and haven’t consolidated?
Mark: Don’t panic. No matter how close you are to retirement, it’s always worth being completely clear about the pension savings you’ve got in one place and where they’re invested. Just remember that the longer you wait, the less time you’ll have to benefit from reduced charges and improved performance. There will also be less time to make up for any exit fees you may have to pay for transferring out of existing pensions. It’s always worth looking into how much consolidation would cost, and compare this with the savings you could generate. A little effort invested in reviewing where you stand could really pay off in the long run.
Q: Why should customers consider consolidation?
Mark: Firstly, customers should review their current pension terms carefully as they may have important benefits or features that they could lose if they transfer, such as if they’re on a final salary pension or if they have a loyalty bonus. We would always advise that customers speak to a financial adviser or discuss their options with our team of experts at Aegon Assist.
Once a customer consolidate their pension savings it’ll make them much easier to manage. They'll know exactly what they’ve got, where it’s invested and how it’s performing.
Q: Online is not really the traditional platform for pensions though is it?
Mark: But why not? Every day, millions of us use the internet to get information, use social media, arrange holidays, read books, listen to music, watch films, buy clothes and groceries. So why should managing your pension be any different? Only 22% of the UK population manage their pension online but that’s a statistic I would like to increase rapidly. Our award-winning online retirement planning service ‘Retiready’ is an easy to use, quick and convenient tool that lets customers bring their different pensions together in one simple, easy-to-manage account. It allows customers to see exactly where they stand and potentially avoid multiple charges.
Q. How can a customer get started?
Mark: If a customer visits Retiready they could try the online retirement service at no cost to get a clearer picture of what their retirement savings are worth now and what they could be worth when they retire. The Retiready pension charges comparison tool is an easy way to see how much they could save. Try it at retiready.co.uk or phone us on 03456 100 072 to talk to one of our experts.