Best plan for consolidating pension pots

alba86

Hi - I need some advice about what the best potential plan would be for me. Despite only being in the labour market for about 8 years, by January I will have 4 workplace pension pots, all of whom had/have their own schemes (Company 1, Company 2, Company 3, acquisition of company 3 by Company 4).

The Company 1 pot has about ~85% of my retirement savings so far, but hasn't been paid into since early 2018. There's about ~12% in the Company 2 pot, and I've only been paying into the third since around July/August 2020 but there is a little bit there. January 2021 will see the scheme with the acquiring company (4) take over.

Is there a way I can consolidate the smaller inactive ones as of January into what was originally the Company 1 pot, without taking an unneccessary tax hit?

dunstonh

Is there a way I can consolidate the smaller inactive ones as of January into what was originally the Company 1 pot, without taking an unneccessary tax hit?

Transferring pensions does not generate a tax liability.

tacpot12

The answer will depend, in part, on whether Company 1 pot is still with Company 1, and if so, whether they will allow you to add to that pot. 
Are the company 2 & 3 pots Defined Contribution Schemes or Defined Benefit Schemes? 

I think in general terms, it is a good idea to consolidate DC pension from earlier employers into a personal pension scheme that you have selected to give you the range of investments you want and low charges. You should always pay into your current employers scheme to get the benefits of any tax relief and any employers contribution. 

Albermarle

Is there a way I can consolidate the smaller inactive ones

Just because you no longer contribute to them does not mean they are inactive.

As above you need to clarify first that they are all defined contribution pensions. See an explanation here if you are not sure.

https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/workplace-pension-schemes

If they are you will be able to transfer them /consolidate them / open a new one with no charges or tax implications .

Brynsam

alba86 said:

Hi - I need some advice about what the best potential plan would be for me. Despite only being in the labour market for about 8 years, by January I will have 4 workplace pension pots, all of whom had/have their own schemes (Company 1, Company 2, Company 3, acquisition of company 3 by Company 4).

The Company 1 pot has about ~85% of my retirement savings so far, but hasn't been paid into since early 2018. There's about ~12% in the Company 2 pot, and I've only been paying into the third since around July/August 2020 but there is a little bit there. January 2021 will see the scheme with the acquiring company (4) take over.

Is there a way I can consolidate the smaller inactive ones as of January into what was originally the Company 1 pot, without taking an unneccessary tax hit?

Don't be in too much of a rush to consolidate. It may be 'neat' and help you keep track of your pensions, but before you go any further, this might be helpful reading: https://www.thisismoney.co.uk/money/pensions/article-3550085/STEVE-WEBB-merge-small-pension-pots.html