Pension consolidation

Is it the right move for you?

With more providers offering tools to help you combine your pension pots, it’s no surprise that consolidation is becoming increasingly popular. On the surface, it can seem like a smart way to simplify your finances.

Here are some of the commonly promoted benefits:

a clearer overview of your retirement savings
greater control over your investments
no setup fees
24/7 online access
potential cost savings
less paperwork
easier performance tracking.

Valuable guarantees and benefits

Some pension plans come with built-in guarantees, such as enhanced annuity rates, bonus payments, or protected tax-free cash. These features can be highly valuable, and transferring your pension could mean losing them permanently. Once forfeited, they’re rarely recoverable, even if you change your mind.

Limited investment options

When you consolidate, your existing investments are typically sold and the funds moved into a new plan. While you’ll be able to choose new investments, the range available may be more limited.

It’s important to ensure the new provider offers funds that align with your risk tolerance, values (such as ESG considerations), and long-term goals.

Hidden costs

Although many providers advertise ‘no setup fees,’ there are often ongoing charges for investment management and administration. You should also check for any exit fees or penalties associated with your current plans before making a move.

Why professional advice matters

Consolidation can be beneficial, but only if it’s the right fit for your personal circumstances. That’s why seeking advice from a qualified Financial Adviser is so important.

An Independent Financial Adviser (IFA) will:

review your current pension arrangements in detail
assess your income, expenditure, assets, and future goals
identify any valuable guarantees or benefits that could be lost
evaluate your investment mix and risk profile
compare costs and fund options
recommend a suitable pension wrapper and investment strategy.

They’ll also handle the paperwork and provide ongoing reviews to ensure your plan continues to meet your needs as your life and legislation evolve.

While advice does come with a cost, it offers peace of mind that your decisions are informed, considered, and tailored to your financial future.

Disclaimers

Crowe Financial Planning UK Limited is authorised and regulated by the Financial Conduct Authority (‘FCA’) to provide independent financial advice.

The information set out on this page is for information purposes only and is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. It does not constitute advice to undertake a particular transaction. Appropriate professional advice should be taken on specific issues before any course of action is pursued. Any advice provided by a Crowe Consultant will follow only after consideration of all aspects of our internal advice guidance.

Past performance is not a guide to future performance, nor a reliable indicator of future results or performance. The value of investments, and the income or capital entitlement which may derive from them, if any, may go down as well as up and is not guaranteed; therefore, investors may not get back the amount originally invested.

The Financial Conduct Authority does not regulate Trusts, Tax or Estate Planning.

Please be aware that by clicking onto any links to third party websites you will be leaving the Crowe Financial Planning website. Please note that Crowe Financial Planning is not responsible for the accuracy of the information contained within the linked sites.