Pension pots - to combine or not?

Dhrucku

In terms of career I'm fairly fledgling and have just accepted a new role and have almost completed a probation period to move on to the new pension scheme.


I've received a letter from my previous employer informing that I am able to transfer the value of my benefits to another registered pension plan and see that I have close to £14k (fund benefits built up from 5 August 2013 until now - fairly small in the grand scheme of things).


My question is, would it just be simpler to consolidate this into my "to be" new pot with my new employer, or should I keep it separate.


I understand that in general you should keep pension pots separate as you may lose certain benefits (not entirely sure what these are to be fair) and sometimes it's actually in the interest of previous employers to consolidate into new employer pension pots.

Espresso79

Before more experienced members answer, I would first understand the differences between the two pension providers?
You might have a more comprehensive portfolio of products with one compared with the other or you might want to retain the possibility of investing in old products ( a lump sum) that you consider more valuable ?

bigadaj

Dhrucku wrote: »

In terms of career I'm fairly fledgling and have just accepted a new role and have almost completed a probation period to move on to the new pension scheme.


I've received a letter from my previous employer informing that I am able to transfer the value of my benefits to another registered pension plan and see that I have close to £14k (fund benefits built up from 5 August 2013 until now - fairly small in the grand scheme of things).


My question is, would it just be simpler to consolidate this into my "to be" new pot with my new employer, or should I keep it separate.

I understand that in general you should keep pension pots separate as you may lose certain benefits (not entirely sure what these are to be fair) and sometimes it's actually in the interest of previous employers to consolidate into new employer pension pots.

Assuming these are defined contribution schemes then it's typically older schemes that come with specific benefits or guarantees, so that shouldn't affect a transfer.

You'll need to check to see if your new scheme accepts transfers in or not.

Some people prefer pensions in one place, and as you move through life then changing jobs can mean you end up with a few but it doesn't fundamentally matter.

The main factors in determining where to move and basically choose where to hold pensions are charges and investment choice, ideally the first is small and teh second large, though most people won't use a huge range of pensions options.

AnotherJoe

There are several options that people choose.
1. keep all the individual ones.
2. transfer last one into new employer
3. move last one into SIPP so you aways have 1 SIPP and 1 current employer.

In general I favour option 3 since as in some cases 2 wont be allowed by new employer so you may end up with option 3 to an extent anyway,and it also gives you an element of independence from current employer. But there may be specific reasons why option 2 is best in some cases