Consolidating pensions

Most people, during their career, accumulate a number of different pension plans. Keeping your pension savings in a number of different plans may result in lost investment opportunities and unnecessary exposure to risk.

By Matthew Bromley, Cowgill Holloway Wealth Management

Traditionally, personal pensions have favoured with-profits funds – low-risk investment funds that pool the policyholders’ premiums. But many of these are now heavily invested in bonds to even out the stock market’s ups and downs and, unfortunately, this can lead to diluted returns for investors.

The potential benefits don’t apply to everyone, and there may even be drawbacks for certain types of pension. It is therefore vitally important to carefully consider all aspects of your existing pensions before making a decision as to whether or not to consolidate. As well as whether the total size of your pension funds make consolidation viable, issues to take into account include whether your existing pensions have loyalty bonuses, early termination penalties. guaranteed annuity rates, integrated life cover or other additional benefits or final salary pension benefits.