5 min read
Pensions for Individuals

Should I consolidate into my existing pension, or a new one?

Catherine Miller

If you’ve done your research and decided consolidation is for you, the next decision is where to put your money. Moving your pension savings into one or more pots can save you time, admin stress and even money. And contrary to popular belief, you don’t have to consolidate into any particular pension account or provider. You can choose one that suits you. 

But should you open a new pension account or use one you’ve already got?

Sticking with what you’ve got: your workplace pension

You will probably have at least one workplace Defined Contribution pension account into which you could consolidate your savings from other pension accounts. Moving your money into a workplace pension account could be one way to keep track of your pension pot. 

The advantage of transferring into a workplace pension account is that you will be provided an option to invest in funds that are managed for you as you move towards your retirement age. You can just sit back, relax, and watch your money grow! 

Additionally, workplace pension providers have to put in place governance committees by law. These committees hold these providers to account on behalf of the pension scheme members, and ensure the provider is providing value for money.  

Sticking with what you’ve got: a personal pension

You might decide to move your money into a personal pension plan, also called a SIPP (Self-Invested Personal Pension). Some personal pensions can be quite ‘hands-off’ in the same way as a workplace pension, i.e. you won’t need to be studying the stock market to choose your investments but you will still be required to make some decisions about where your money goes. Other personal pensions might need you to pay close attention to your investments.

Moving your money into a SIPP could be a good choice if you like to have total control over your money, and you’re confident in navigating the world of trusts, funds, shares and other investments. But, this won’t necessarily lead to better outcomes, and could take quite a bit of time and effort. Additionally, fees are generally higher in SIPPs compared to workplace pensions.  

Opening a new account

Consolidation can provide an opportunity to open a new account with a different provider. If you’ve just moved from workplace pension to workplace pension, this might be the first time you’ve been able to assess pension providers for yourself. Exciting! But you’ll need to do your research to check out some of the details such as fees, retirement options, and digital access. We help you do that for some of the major personal pension providers here. 

As a quick note: you won’t be able to open a new workplace pension for yourself. Therefore, if you decide to open a new account, it will need to be a personal pension (as above).

One advantage of opening a new account could be getting a better deal in terms of fees, or a wider range of investment options, if that’s something that matters to you. You may also be looking for a provider with an app to make it easier for you to manage your pension through your phone, or a provider that allows you to make small contributions into your account. Additionally, if you already have some ideas about what you want to do with your money when you retire, you might be looking for particular options such as being able to buy an annuity. And you might find an investment structure that is more suited to your needs. 

Of course, opening a new account comes with some administrative hassle. And just because a provider is new and shiny, doesn’t mean it has lower fees or better investment options. In fact, the points that applied to an existing personal pension above also apply to a new personal pension: you may need to make some decisions about where your money is invested, keep an eye on those investments as you get older, and you may face higher charges.

Watch out for scams

Financial scammers have even turned to pensions to try to fleece people out of their money. This can include fake pension accounts with lots of attractive benefits attached, like high yields or early access to your savings. But an offer that’s too good to be true is usually just that. If you receive a pension offer by email or phone, it’s best just to ignore it. And, if you decide to consolidate into a new pension account, make sure you research the provider thoroughly before transferring your money. 

Whatever you decide, Maji’s here for you

Whether you want to bring everything into your workplace pension, or set up a new account, Maji is here to help. Chat us your questions, or connect with an IFA through our Academy for a more thorough conversation. And complete your consolidation coaching journey for more tips on how to actually move your money. 

At the end of the day, what’s most important is getting your dosh growing, so you can look forward to a comfortable future. 

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