Knowing what to do with multiple pensions needn’t be too complicated a process. Thanks to modern multiple pension rules, consolidating all of your pension pots means you only have to deal with one pension, which makes everything clearer and much easier to control.
Here we answer the question ‘can you have multiple pensions?’ and explain exactly what to do with multiple pensions.
CAN YOU HAVE MULTIPLE PENSIONS?
The simple answer is yes, of course, but it is worth understanding why exactly you can have multiple pensions. The reason is that most people work for different employers at various stages throughout their life and career, and each employer is likely to have started a separate pension plan.
Once the employee moves on, that pension pot remains and can eventually be consolidated with all other pension pots into one single scheme.
WHAT TO DO WITH MULTIPLE PENSIONS
Modern multiple pensions rules allow you to move all of your pension fund - including multiple smaller pension pots - into a single plan. This obviously simplifies the entire process for you, and lets you keep tabs on your pension without needing to monitor multiple different schemes.
You can get good pension advice in Derby by speaking to a local provider, who can talk you through all of the potential options for what you can do with multiple pensions.
A good provider will be able to tell you that there are significant benefits to consolidating multiple pensions, so let’s look at some of the major advantages as well as any potential disadvantages of the multiple pensions rules for consolidation.
ADVANTAGES OF PENSION CONSOLIDATION
Each individual pension plan comes with its own management fees, so if you have multiple pension plans then you will be paying multiple fees. By consolidating them all into a single lower charging plan, you immediately lower the fees you need to pay to manage your pension.
Another advantage is that pension consolidation enables you to move capital to a pension plan with better investment options. There are also some pension types which give rewards, such as guaranteed annuity rates that you can take full advantage of to maximise your returns.
DISADVANTAGES OF MULTIPLE PENSIONS RULES
Everyone with multiple small pension pots should be aware that consolidating all of them into one scheme may incur some costs. It is not guaranteed, but there are some pension plans that demand a fee to be paid in the event of consolidation. Sometimes there can be other costs associated with consolidating as well, so it is important to be aware of all of these fees and potential charges before going ahead with your consolidation.
To check up on any due consolidation fees, read through the terms and conditions of each pension plan as it should be fully outlined there.
If you want to learn more about multiple pensions rules and what to do with multiple pensions, then book a meeting with the experts at Integritas Financial Planners.
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