Pension consolidation could save you time and money


Financial jargon can make it difficult to understand what is being talked about and as a result puts people off taking more control of their pensions and savings, when it could save them time and money.

One bit of jargon that is often used when it comes to pensions, is “CONSOLIDATION”. But what does it mean and how could it benefit you?

Pension consolidation simply means “bringing together a number of pension pots into one” reducing the total number of pensions you have, transferring the money from lots of different pensions into a single pension. It really is as straightforward as that.

There are lots of reasons why this could be a good idea. It could save you money and it will certainly make it easier to manage your pension savings, when it’s all in one place. It will make it easier to monitor the performance of your investment and help you plan more effectively for the future. It could even stop you forgetting about any of your older pensions when presented in a modern on-line environment. Having one consolidated pension pot could help you to build up a bigger pension pot for retirement, and make it easier to access the benefits from your pension savings in later life.

That’s quite a list.  At Aegon, we estimate over 80% our pension savers have more than one pension and could benefit from consolidation. (Source: Aegon customer research, 2016) If you’re in a similar position, then you could make a positive impact on your pension savings by thinking about consolidation. Of course, as with any financial decision, there are risks involved. If you’re unsure what is involved, or want to discuss if consolidation is the right decision for you, it’s important you seek financial advice.

Consolidation could save you money

If you’ve got lots of different pensions, it can be difficult to keep track of the individual charges for each pension. It’s unlikely you’re paying the same charge in all of them and some will have higher charges than others.

By consolidating lots of different pensions into a single pension with low charges, you might be able to save money.

Better management through consolidation

When all of your pension savings are in a single pot, it’s a lot easier to see exactly what you’ve got. You won’t have to log in to different online accounts or phone up multiple providers to get a value for each of your pension schemes.

Making it easy to keep an eye on how your pension savings are performing, makes it easier to see if your pension is growing in value, or if you should switch investments to seek out better returns or alter the level of risk.

Plan more effectively by consolidating

Pension planning is all about making sure you have enough money to afford the lifestyle you’d like in retirement. Once you have worked out what annual income you think you’ll need, you can then calculate how much income you’ll need your retirement pot to generate.  Aegon, have a Lifestyle planner tool that could help you figure this out, just add in simple things like your food shopping bill, regular outgoings, the amount you spend on petrol…et voila!

Once you’ve got this target figure, it makes planning your pension easier, and if all of your pension savings are in one place, you can see their value at a glance. Whether planning alone or with an adviser, having a single view of your savings gives you a clear idea of what you’ve got, and creates the best foundations for putting in place plans to help you reach your goals.

If you can secure lower charges through consolidation and better returns from careful investment monitoring, you could end up with a bigger pension pot.

Keep track of your pension pots

One of the biggest problems with having lots of different pension pots is that it’s easy to forget about some of them. You’ve probably had more than one employer in your career and if you’ve joined the workplace pension scheme at each of them, they soon add up. You might have started your own personal pension too, so that’s another one to think about.

Auto-enrolment legislation demands that employers automatically enrol eligible employees into a compliant workplace pension. As a result of the legislation, more than 8 million people have begun saving into workplace pension since 2012 (Source: The Pension Regulator, July 2017). This’ll add to the number of pensions people build up over a lifetime.

Instead of keeping your savings in an old employer’s workplace pension when you move jobs, transferring the money into the scheme offered by your new employer will keep everything together. If you don’t, some of your pension savings could easily get forgotten about – it’s estimated there is currently over £5 billion in lost pensions (Source:  the Pension Tracing Service, 2017). 

It’s easier than you think to lose track of an old pension, but consolidation will make sure it’s not your money that goes missing.

To find out more about consolidating your pension pots visit

You should be comfortable with the investment choices that you make as you may lose features, protections, guarantees or other benefits when you transfer. If you’re not sure, you should speak to a financial adviser.