Getting your pension plan sorted long before you need it is always a good idea, though it can get a little more complicated when you’re dealing with multiple pension schemes. If you’re someone who has realised ‘I have several small pension pots’ and you’re wondering how to proceed, then pension consolidation is the answer.
Pension consolidation refers to the process of merging multiple pension plans into a single scheme. A lot of folks around the UK have accumulated several pension pots from a variety of sources, and consolidation is how they can simplify their retirement planning and reduce the management fees. By consolidating multiple pension plans into one single scheme, there is also the potential for better investment returns due to economies of scale.
Let’s look closer at how people accumulate multiple pension schemes, how you can consolidate them and the benefits of doing so.
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People acquire multiple pension schemes throughout their life simply by working for various employers in different jobs and for different companies. Some individuals may also have different self set-up pensions which also need to be consolidated.
This is not an ideal situation as multiple pension plans mean you are paying more in management fees for the different plans. It can also be an administrative nightmare that lacks clarity and control over your investment strategy.
First you must gather all of the information you can about your existing pension plans, such as the providers and policy numbers, as well as the current values of each pension pot.
Then conduct a review of each scheme to assess the fees involved, investment options, and overall performance. Read through all of the terms and conditions and look for any charges and fees due upon consolidation. Also look out for any benefits or guarantees attached to one or more of your existing pensions which you could lose upon consolidating them.
Once you have all the information, simply get in touch with your new provider to let them know that you want to consolidate your multiple pension plans. It may be easier to get pension advice in Derby from a local provider, so look into your options.
Your new provider will then start the consolidation process by supplying you with any necessary paperwork needed to initiate the consolidation process. They will also communicate with the existing pension providers on your behalf to transfer the multiple pension scheme funds into your new consolidated pension plan.
There are several significant benefits of consolidating multiple pension schemes, with the simplified administration and potentially lower costs from reduced fees being the most obvious ones. The process could also produce additional retirement and death benefits options. Plus there is the potential for more investment options, and an overall better performance from your consolidated pension plan.
Consolidating your multiple pension plans might be the right move for you, so contact the experts at Integritas Financial Planners for advice on how to consolidate your pensions.
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