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How To Consolidate Pensions

If you have multiple pensions, these could be becoming harder to keep track of as you start to think about the best ways to organise and invest your savings, and how you’ll use the money in retirement. For this, discovering how to consolidate pensions, could make managing your finances much simpler.

Read my guide to find out how to consolidate your pensions, some of the best ways to do so, and whether it could be a sensible thing for you to do.

Also consider: My guide on how to transfer a pension

My step-by-step guide to consolidating your pension pots

  1. Make a list of all your previous employers.
  2. Search for corresponding paperwork or contracts you may have for previous pension schemes with these employers – you could use the Pension Tracing Service if you have difficulty finding them.
  3. Make a list of all the pension pots you may have and each of the providers they are with – especially any existing pensions you may not have been aware of.
  4. Decide which scheme you’d like to combine your pensions under. This could be one of your existing schemes or even a new pension provider. Check my recommendations for best pension providers in the UK

What is pension consolidation?

Pension consolidation is when you combine multiple pensions you have under a single scheme.

Over your lifetime, it’s possible that you might have built yourself a collection of different pensions.

Often, this is a result of being enrolled in a new scheme when you change employers and are signed up to their workplace pension in the process. Equally, you may have decided to start your own personal pensions with various different providers, too.

No matter the reason for you having more than one pension, pension consolidation allows you to combine all of your pensions, which may include a variety of schemes, into one plan.

By consolidating your pension pots into one fund, it can make managing your retirement finances easier. You might also get better value from certain providers, a clearer picture of your finances, and better ease of management over your funds.

How to consolidate your pensions

One of the very first steps to consolidating all your pensions is to not leave any behind.

Before deliberating on the details of your consolidated pensions such as which provider to choose, or what type of scheme to opt for, you should make sure you have located every single one of your old pensions if possible.

This is important as you may have numerous pensions from different employers, for example. Forgetting about any of these could result in you losing some of your hard-earned retirement savings.

You should make a note of every pension pot you locate, and it can also help to include as much information about each pension you find. This may include whether they are defined contribution pensions or defined benefit pensions.

If you think there are other pensions you have but you simply can’t find any evidence of them, try using the free Pension Tracing Service to aid your search.

After this, if you’re certain about moving to a new provider, you need to inform your current pension providers that you’d like to transfer your pensions.

You may want to consider researching different options and aim for a well-established provider.

If you have multiple pensions across different schemes, and changing your provider isn’t necessary for your circumstances, you may wish to simply consolidate these into one of your pre-existing pensions that suits you the most.

In this case, you should still inform your provider of your wishes. They will then provide the necessary steps to complete your consolidation or pension transfer. This may entail completing exit forms and other paperwork to certify your decision.

Nowadays, a lot of providers offer online services to help with transfers and consolidation. So, it’s worth checking your provider’s website for more information relevant to your pensions, such as whether the provider of your pension charges exit fees.

Also consider: My guide on how to transfer a pension

What is the best way to consolidate pension savings?

Pension consolidation can be a serious decision to make, and rushing into it could negatively affect the value of your savings if you don’t take the necessary caution.

So, taking a careful and calculated approach to your pension consolidation plans could prevent you from making any rash decisions that could harm the value of your pensions.

Once your mind is made up, opting for a longstanding pension provider with a solid reputation to handle your consolidation could be a sensible choice. Since you’re dealing with large amounts of money that you’ve likely worked all of your life for, taking every measure to prevent unnecessary loss is paramount.

Consolidating different kinds of pensions

As a result of the variety of pension products that exist, there can often be some confusion regarding which pension schemes are permitted to be combined.

Normally, most pension schemes will allow you to transfer your pension to a different plan.

This is true for workplace pensions as well as personal pensions, although you should make sure you understand the details of what your own schemes allow as their rules may differ from others.

Having said this, it’s worth checking whether you have a defined benefit (or “final salary”) scheme. This is because it’s possible for such plans to have unique benefits you may be sacrificing by combining multiple pension pots, most notably a guaranteed income in retirement.

It is also generally a condition that you must take financial advice before moving a defined-benefit pension.

The decision to consolidate defined contribution pensions may also involve losing some valuable benefits when you combine them with other pension plans, but this is much more relevant to final salary schemes.

So, it’s useful to know every detail of your pensions, and what consequences there may be, before consolidating – you could be jeopardising your retirement income otherwise.

If you’re unsure which type of pension you have, it may be worth taking personal advice from an independent financial adviser.

Get a FREE Pension Review

Get a free no obligation pension review today from a qualified financial adviser.
Our partner Unbiased will connect you with one of over 27,000 FCA-regulated advisers.

Pros and cons of pension consolidation

Your own circumstances can often play a role in deciding whether you should combine your pensions or not.

Here are some of the pros and cons of pension consolidation to consider as you weigh your options.


  • It can make managing your pensions much easier

Since they’re all combined into one pot, you’ll likely only need access to a single pension pot in order to manage your funds.

Rather than going through each individual pension and managing them accordingly, having them all in one place could make your life much easier and may even encourage you to take more of an active role towards managing your savings.

  • You could save money on management fees

It’s possible you’re paying for the management of each of your multiple pension pots, whereas combining your pensions could avoid this.

While there may be a small initial fee in order to combine your pensions, you could save more over the long term by paying a lower amount in fees.

  • You could get better performance from your investments

Some pensions allow different kinds of investment options than their counterparts which could enable you to have greater control over your investments and pursue a plan that is more appropriate for you.

You could consider moving to a self-invested personal pension (SIPP) in order to do this, allowing you to choose the investments that your pension funds will be invested in.

Additionally, some of your investments may not be as successful as others. So, by combining pensions into the best-performing pot over the long term, you could get better returns.

You should remember that returns are not guaranteed, and past performance is not a reliable indicator of future results. That being said, I have listed some of the best performing pension funds in the UK in my Best Pension Providers article.

  • You could avoid the issue of losing track of pensions

Most people have multiple pension pots, some of which are likely to be lost.

In fact, the Pension Tracing Service estimates there is around £20 billion sitting in lost pensions.

So, after consolidating your all pension pots into one individual pot, you could reduce the risk of losing track of a pension that slipped your mind as there is only one to remember.


  • Defined benefit pensions may not be worth consolidating

Some of the features of a defined benefit pension scheme (also known as “final salary” pensions) could be lost when you combine pensions, such as the entitlement to withdraw a bigger lump sum or a guaranteed income in retirement.

It’s always worth checking whether you have a final salary pension as this may make you reconsider consolidating this pension.

  • You may also lose benefits when consolidating defined contribution pensions

Similarly, defined contribution pensions could have additional benefits that you may be at risk of losing by combining your pensions.

Examples of features you risk losing could include a higher annuity rate or a tax-free lump sum. You could lose these benefits if you move your funds away from the scheme that offers them.

  • Consolidating your pensions can be a costly procedure

If you decide to seek financial advice about pension transfers, as would usually be recommended, you should consider the fees from this in addition to the amount of time the process could consume.

It may take you a long time to find the necessary paperwork to use as evidence for your pensions. This could take even longer if you can’t find them and need to rely on tracing tools.

Although these costs may be negligible compared to the convenience you may get in return, they’re still worth factoring into the whole process.

Get a FREE Pension Review

Get a free no obligation pension review today from a qualified financial adviser.
Our partner Unbiased will connect you with one of over 27,000 FCA-regulated advisers.

Is pension consolidation safe to do?

By using an authorised and regulated pension provider, there is often very little risk in consolidating your pensions.

This is important to remember as scams and malicious actors often target people who want to move their pensions to try and steal their funds. If you don’t take the necessary precautions to verify the authenticity of a pension provider, you could be at risk of losing your entire pension to scammers illegally posing as a provider.

Because of this risk, you should consider using reputable pension providers with a long history of quality service. It could help to check The Pensions Regulator to remind yourself of the important details to look out for.

Meanwhile, when dealing with any matters relating to your pension, it can be helpful to remember that pensions are investments. This means that the value of your pension funds could decrease as well as increase.

By combining pension pots, it’s possible that some of your investments will be under different stipulations that could have the potential to affect your investments by limiting your control over them or increasing fees, for example.

In some cases, this could damage the value of your pension savings if you don’t take the necessary measures to prevent this.

Ideally, the investments in your pension pots should reflect your risk tolerance which could change throughout your life. As such, you could treat your consolidation as an opportunity to streamline your pension investments to more closely resemble the risk you’re willing to be exposed to.

Meanwhile, having all of your pension savings in one pot could carry a slight risk.

As the adage goes, to “put all your eggs in one basket” could expose you to a greater level of risk in the unlikely eventuality that your pension provider defaults or becomes insolvent for whatever reason. Factor this risk into your decision, too.

You should consider contacting a financial adviser if you find it daunting, or if you want to hear the opinion of a professional on the matter – they could help guide you towards the right decision while factoring in your own personal circumstances.

How to consolidate pensions FAQs

Can you merge pension funds?

Yes, you can merge certain types of pensions into single funds. Merging the money in each of your pension pots into one pension is referred to as “pension consolidation”.

Is it best to move pension pots into one?

Your own personal circumstances are the most important factor in determining whether pension consolidation is the best move for you. Consider speaking to a financial adviser to help you make the appropriate decision.


Please note

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.

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