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Can I combine my pensions?


1st August 2019


General News

Over the years, you may have accumulated a number of pensions from different employers. Keeping track of their performance isn't the easiest, but if you're looking to get the best out of your overall pension it may be wise to look at combining them.
Speak to an independent financial adviser for guidance and to gain a better understanding of your pension and retirement planning options.

Should I combine my pensions if I’m in a final salary scheme?

If you’re one of the lucky few to have been entered into a final salary scheme (also known as a ‘defined benefit’ scheme), transferring your pension or consolidating it into a new plan is often ill-advised.

Final salary schemes pay out an income based on how much you earn when you retire. They aren’t affected by how much you contribute to your pension pot – this type of scheme is called ‘defined contribution’ and tends to be less lucrative in the long run.


Why should I consider transferring or combining my pensions?

If your other pensions are in defined contribution style schemes, you may want to consider consolidating them. This is because each pension is actually a type of investment – the success or failure of your pension will depend on its performance.

Sometimes, having multiple pensions in different schemes can affect your final pension pot negatively, especially if individual pension schemes are performing poorly and charges are high.

This example from the Which? website explains it best:

“If a 35-year-old with a £10,000 pension pot invests until 65 in a fund that achieves 5% annual investment growth, but charges 2% a year, the pot will be worth £23,720.  The same £10,000 invested in a fund that achieves 7% annual investment growth, with a 1.5% annual charge, will be worth £48,541 – more than double.”

By combining your pensions and making informed decisions, you may be able to improve the overall performance of your pension and increase the options available to you in the future when you reach retirement.


When should I consider transferring or combining my pensions?

As you approach retirement, you will find that your pension pots will have increased in value significantly. If one or more of your funds are performing poorly, you may be considering combining your pensions. However, this can be a complex process and you will need to enlist the help and guidance of an independent financial adviser.

Deciding whether the fees for advice are worth it or not will depend on how happy you are with your current pensions, and how they are performing. At this point, the advice of an expert independent financial adviser can be priceless in setting you in good stead for the future.

Take Mr B of Maldon, for example, who was due to retire and came to us for advice. He had a number of old work-based pension plans – along with a personal pension – that he wanted to consolidate to provide a capital lump sum to cover some planned home improvements and a holiday.

He was also looking to provide a regular yet flexible income stream to bridge an unexpected income shortfall until he was due to receive his state pension in three years’ time.

We explained the various available retirement strategies to Mr B and recommended an income drawdown arrangement, as this gave him the ultimate capital acquired by taking a tax-free cash lump sum along with the desired level of income. Unlike an annuity, once he is in receipt of the state pension we can reduce the income received from the income drawdown plan if this current level is no longer required, giving Mr B maximum flexibility.

He also now has the ability to take additional capital lump sums if the need were to arise, and has also given him added piece of mind that his wife will have access to the remaining funds within his income drawdown plan in the event of his premature death.


Who can help me combine my pensions?

Perspective (East Anglia) is a firm of experienced Financial Advisers, delivering a professional and specialised service to individuals and businesses throughout East Anglia and beyond.

If you are looking for expert advice on whether to consolidate your pensions, and how best to take them at retirement, speak to us today at or call 01376 331800.