Consolidating pensions

pledgeX

I started a new job recently and am looking at consolidating my pension from my previous job.

My previous pension is with Aviva (Aviva Pensions Mixed Investment (40-85% Shares) S6), and the new one is with Orbit/Capita (Legal and General Multi Asset Fund (PMC) 3) Mixed Investment 40-85%).

The AMC on the former is 0.65%, whereas the latter is 0.48%. Neither has fees for transferring in/out. They're both defined contribution schemes, no complicated final salary schemes or anything.

The main reason for me wanting to consolidate is just to make it easier to keep track of, and the slightly lower fees (it's only ~20k so it's not going to make a massive difference).

Any reasons why consolidating is not a good idea? The type of funds are very similar so I don't think keeping them both open would be 'spreading' the risk.

Linton

Consolidating small DC pensions is a sensible idea unless there are specific reasons not to. Possible reasons are:
1) Guarantees which would be lost - this is the key one

2) Total charges could be higher depending on where you consolidate to.

3) Loss of access to fund choice, depending on where you consolidated to.
4) Anything else I think of later


If none of these apply then there should be no problem. It may be worth asking whether you can transfer into your new employers pension. Employer pensions can have lower charges if they are subsidised by the company or if the company can make special arrangements with the provider.

Brynsam

It may be worth asking whether you can transfer into your new employers pension. Employer pensions can have lower charges if they are subsidised by the company or if the company can make special arrangements with the provider.[/QUOTE]

Very valid points, but employer's consent won't be needed if this is a Group Personal Pension, which these days is highly likely.

pledgeX

It is a group pension plan and they have confirmed I can transfer in.

Albermarle

You might as well just go ahead . One less piece of paperwork and one less institution to inform if/when you move home . Plus the charges are a bit cheaper.

ffacoffipawb

The fact your new pension is with Capita would give me some concern. They aren't known as Crapita for nothing.

ratechaser

I'm going through this due diligence process as well right now... have 4 DC pots, one of which is with my current employer who fully covers all management fees, and has a decent fund mix. 2 of my other 3 pots have higher charges (in fact one looks to have been overcharging me, which is a separate problem being worked through...) and no better fund mix/performance, so I will be moving them in. That will get me shot of Aviva/FL and Fidelity.

The final pot has fairly moderate charges, and a very wide and well performing fund mix, so I'll be keeping that separate. Ironically it uses the same administrators/platform as my first one that I'm consolidating into (Towers Watson), which plays havoc with the bookmarks and saved passwords on my phone when I'm trying to look at both of them...

The other