SJP Consolidating your pension
As you make your way through your working life, and move from job to job, it is very likely that you will acquire a range of different pension plans.
It’s also possible that you may have a mix of Defined Benefit (DB) and Defined Contribution (DC) pensions (see 'different types of pension’ for an explanation of the difference).
DB pensions are slowly becoming rarer, mainly due to the cost implications for employers to offer them. Now you will find many employers offer workplace pensions that are Defined Contribution (DC) to employees, which is increasingly becoming typical for pension savings.
However, DB pensions remain incredibly valuable for those people that have them, because of the guaranteed lifetime income they offer, along with other benefits.
Is combining your pensions a good idea?
If you are thinking of bringing all of your pensions together, perhaps to take advantage of improved charging structures, or more flexibility, it is imperative that you take financial advice before making any decisions. In order to ensure that valuable benefits are not being given up without proper consideration, you will need to take regulated financial advice on any ‘Cash Equivalent Transfer Value’ (CETV) above £30,000. The CETV can be provided by the DB scheme administrators.
You have the choice with what you do with your retirement savings, however, once you have given up your DB scheme benefits and transferred away, you cannot go back, so think carefully about what you will be giving up.
Transferring pensions from other providers does not work in all cases. We would rarely look at transferring as a first option and would only be recommended in exceptional circumstances. Considerations such as guarantees would need to be viewed to ensure suitability.
Your St. James’s Place Partner will be able to discuss this in much more detail with you, and provide the expertise that you will need.