Looking for a new home for your pension pots? If you’ve started other defined contribution pots throughout your career, you can easily transfer them to a Wesleyan Personal Pension Plan.
Throughout your life, you may have built up a number of pension pots as a way to save for retirement. Pension consolidation means bringing together these multiple pension pots or schemes into a single plan.
For many people, the main goal of consolidation is to make it easier to manage pensions. Other benefits include potential cost savings, improved investment options and greater control over your retirement planning – as we’ll see below.
Pension consolidation can be a relatively straightforward process, but it’s a decision that shouldn’t be taken lightly. While there are many benefits associated with merging your pension pots, there are some things to consider before making a decision.
For example, you may lose certain benefits associated with your existing pensions. These benefits might include:
That’s why it’s important to carefully review the terms of any pension scheme you’re in before consolidating.
Bringing together your pension pots into one place can offer several benefits, including:
While there may be some differences between providers, the process of combining your pension pots usually involves the following steps:
A good place to start is by collecting all the information you have about your existing pension schemes. This includes details of pension providers, policy numbers and the current value of each pension pot.
If you’re struggling to track down your old pensions, one option is to reach out to your previous employers. They should be able to provide you with information about the pension scheme you were enrolled in while you were working for them, including the contact details of the provider.
If this isn’t possible, you can also use the Pension Tracing Service (PTS) available on the UK government website. This service will help you to locate both workplace and personal pensions, but you will need the name of an employer or pension provider before you can start the search.
When you’re reviewing your pensions, assess the terms and conditions, fees, investment options and performance of each of your schemes. You should also take into consideration charges, fund choices and flexibility, as well as any valuable benefits or guarantees attached to your existing pensions.
If you decide that merging your pension pots is the right option for you, the next step in the process is to select a plan that is most suitable for your needs. As part of this step, you'll need to decide whether to move all of your pots into an existing scheme or whether to start a new pension.
If you decide to start a new pension, it will need to be one that accepts transfers, such as the Wesleyan Personal Pension Plan.
At this stage, your new pension provider will supply you with the paperwork needed to initiate the transfer process. Once this has been completed, they’ll communicate with your existing pension providers on your behalf to transfer the funds to your consolidated pension plan.
Once you have your consolidated pension, it’s important to keep track of its performance to make sure it is progressing in line with your retirement goals. This way, you can make any necessary adjustments to your plan over time.
If you’re part of a defined benefits scheme, such as the NHS Pension Scheme or Teachers’ Pension Scheme (TPS), it’s highly unlikely that you will be able to transfer your benefits to a new pension. This is because transferring out of a defined benefits scheme is heavily restricted.
As such, you won’t be able to transfer your benefits to a personal pension or to a defined contribution workplace pension. And, while in some cases it is possible to transfer to another defined benefits scheme, most do not accept transfers from the NHS or Teachers’ Pension Schemes.
Depending on the terms and conditions of your existing pensions, you may encounter some costs throughout the process.
For example, you might incur exit fees if you choose to leave. The specific amount will vary between pension providers and schemes. Some providers may charge a fixed fee, while others may ask for a percentage of the pension value being transferred.
You’ll also need to consider any costs associated with your new scheme (such as investment charges and management fees) and how they may impact the overall value of your pension.