It depends on your individual financial situation and goals. Consider the following factors before consolidating pensions: 


Fees and charges associated with each pension


Investment options and performance of each pension


Access to pension benefits

e.g. age, conditions


Death benefit options


Insurance benefits

e.g. life, disability


Any exit fees for leaving current pensions

Consolidating pensions can simplify your finances and make it easier to manage your retirement savings, but it’s important to weigh the pros and cons and understand the impact on your overall financial plan. It’s recommended to consult a financial advisor to determine the best course of action for your specific situation. 

Are there any reasons not to combine my pensions 

Yes, there are several reasons not to combine your pensions, including: 


Loss of benefits:

Combining pensions may result in loss of valuable benefits, such as guaranteed annuity rates or death benefits.


Higher fees:

You may end up paying higher fees for the combined pension plan, which can eat into your retirement savings.



Combining multiple pensions into one can be complex, and you may need professional financial advice to ensure it is done correctly.


Risk of underperformance:

By consolidating your pensions into one fund, you are increasing your exposure to the risk of underperformance of that single fund.


Ineligibility for certain benefits:

If you are eligible for certain benefits from your existing pensions, you may lose eligibility for those benefits if you consolidate them.

How do I decide about combining my pensions? 

Here are a few key factors to consider when deciding whether to consolidate your pensions: 



Make sure you understand the benefits of each pension plan and weigh the pros and cons of keeping them separate or consolidating them.


Investment options

Look at the investment options available in each pension plan, and determine whether consolidating would provide more investment choices or restrict your options.


Future flexibility

Take into account your future plans and financial needs, such as the likelihood of needing to access your pension funds early or the ability to make changes to your investment strategy.



Consider the fees associated with each pension plan, including administration fees, investment management fees, and other charges.


Provider Trust

Consider the reputation and track record of the pension providers, and make sure you trust them to manage your money effectively.


Tax implications

Consider the tax implications of consolidating your pensions, including the potential impact on your current and future tax bill.

Can I combine my defined benefit pensions? 

Yes, you can combine your UK defined benefit pensions. This process is called pension consolidation. You can transfer the benefits from multiple defined benefit pensions into a single plan, which can simplify administration and sometimes offer better investment options or lower fees. However, it is important to consider the potential consequences of transferring out of a defined benefit scheme, including loss of guaranteed benefits, and to take professional financial advice before making a decision. 

Do any of my pensions have guaranteed annuity rates? 

It depends on the specific pension plan(s) you have. Some defined benefit pensions may offer a guaranteed annuity rate, which provides a set income for life based on the size of your pension pot and the rate at the time you retire. However, these types of pensions are becoming less common, and most pensions today are defined contribution pensions, which do not offer guaranteed annuity rates. To determine if any of your pensions have guaranteed annuity rates, you should check the details of each plan, consult with the pension provider or your adviser could do this for you. Having a guaranteed annuity rate (GAR) is predominantly a favourable reason for not transferring your pension, doing so would cause you potentially lose out on a higher annual income. 

Am I saving enough into my pension? 

It depends on your personal circumstances and financial goals. You can determine if you are saving enough by considering factors such as your current age, desired retirement age, estimated living expenses in retirement, and any other sources of retirement income you may have. It’s also important to regularly review and adjust your pension contributions to ensure they align with your changing financial situation and goals. As a guide a person should be looking to save 15% of their annual salary value into their pension, however it is worth considering the positive aspects of saving larger amounts within the allowed limits. 

The annual allowance is the limit to the amount of tax-free money you can accumulate in your pension per tax year while still receiving tax relief. This is not the maximum amount you can contribute, but only tax relief is given on contributions below the annual allowance. The way pension savings are measured against the annual allowance varies depending on the type of pension scheme. 

For defined contribution pensions, it’s determined by adding your contributions (including tax relief), employer contributions, and contributions made by others on your behalf. For defined benefit pensions, it’s calculated based on the increase in the capital value of your pension benefits over the tax year. You can request this information from your provider. 

Currently, the annual allowance for most people is £40,000. However, tax relief is capped at 100% of your earnings, meaning if you earn less than £40,000, your tax relief will only be up to your earnings. If you earn less than £3,600, you can still receive tax relief by contributing up to £2,880. 

Get in touch? We can help.

Are you tired of managing multiple pensions and struggling to keep track of their performance? Consolidating your pensions with Credencis can simplify your financial life and help you achieve your retirement goals. Email or call 01158 967 538.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.