Pensions confusion - Pensions everywhere!

AshaM

Hello

I need some help! I am 27 years old and have 3 pensions currently. 2 witha previous employer and one with my current employer. I'm confused about what i should do. In my career I'm obviously goign to have many jobs and role (chasing a higher wage - internal promotions, we know, are scarce!) and therefore could end up having any number of pension schemes dotted around with different companies.
What do I need to do to consolidate them? Where's best to consolidate them too? Who can help me? Why can't I just get a random pension and then manage it myself so all my pensions go into there, rather than every employee pension scheme?

Please help! Massive pension confusion!

stubtoe

So many questions!

AshaM wrote: »

What do I need to do to consolidate them?

You don't have to consolidate them, although you may wish to if you feel its in your best interests to do so because of charges/fund choice/administrative simplicity etc.

AshaM wrote: »

Where's best to consolidate them too?

Short answer, it depends. If you were willing to pay for advice from an IFA they would be able to answer this question for you, otherwise you're pretty much on your own and must do your own research. However, it all pretty much boils down to cost and fund choice (and service to a degree) - find the lowest cost stakeholder/personal pension/SIPP that offers you the type of funds you want to invest in.

AshaM wrote: »

Who can help me?

If you want advice you can find an IFA try:
https://www.unbiased.co.uk/
https://directory.moneyadviceservice.org.uk/en

If you want to DIY you need to do some research. I'd start by getting up to speed with pensions in general and then start getting to grips with how to go about picking suitable investments. I'd suggest starting here:

https://www.moneyadviceservice.org.uk/en/categories/work-pensions-and-retirement - Basic pension info
http://monevator.com/ - Good place to start learning about investments (start with the links on the right)
http://www.hl.co.uk/ - I'm not suggesting you should use HL for your pension, but their website contains some good info about pensions, consolidation, investments etc

AshaM wrote: »

Why can't I just get a random pension and then manage it myself so all my pensions go into there, rather than every employee pension scheme?

You could, although if your employer makes a contribution to your pot (which they must do by law soon anyway) AND they are unwilling to make that same contribution to a pension of your own choice (some might), why would you not take advantage of this 'free' money'?

Granted, if the employer scheme ain't particularly great, or you think you could do it better DIY, by all means just contribute the minimum to your employer scheme to get their matched contribution (or whatever) and save any extra in a separate pension you manage yourself.

If you subsequently leave that employer, you could always consolidate that scheme (assuming its defined contribution) into the DIY pension you have on the side if it makes sense to do so.

I was in your boat a few years ago and did just what you are suggesting - I consolidated a few old employer pensions into one new DIY low cost SIPP. Whilst the charges were higher on the SIPP, I couldn't access the funds I wanted to via the employer schemes and believe that the greater performance potential of the funds I now use will more than compensate for the slightly higher charges. Only time will tell whether that was the right decision or not such is the way of investing.