Combining multiple pensions?

AHWGenX

I have job hopped throughout my career and accumulated approximately seven different private company pension pots.

I hit 62 years in June and am now working part time and looking to, potentally, start drawing down my pensions.

Is it worth combining these pots and buying a single Annuity (don't really need a tax free lump sum), does having a larger pot give an individual more buying power when buying an Annuity? 

The Pension Pots range from £15k to just over £200k from a range of large PLC's

Is there an "easy" / time efficient way to combine pension pots?  Am happy to put the legwork in as I don't want to waste £ having an IFA do all the work.

dunstonh

Is it worth combining these pots and buying a single Annuity (don't really need a tax free lump sum), does having a larger pot give an individual more buying power when buying an Annuity? 

Higher fund values can lead to better annuity rates.  However, what is important is what your target income is and not the number of pensions you have.  You may need to combine the lot to hit your objective or you may not.

You would take the TFC when buying an annuity as its not tax efficient to not take it.

Is there an "easy" / time efficient way to combine pension pots?  Am happy to put the legwork in as I don't want to waste £ having an IFA do all the work.

They will be combined as part of the purchasing the annuity.   

You will be paying someone to do the work, whether you use an IFA or not. And with larger funds, you will often pay more using internet-based annuity retailers  than you would an IFA.    

TadleyBaggie

I paid an IFA £2K to come up with a retirement plan and combine my 6 pensions into a single pot, it was money well spent.

DRS1

At your age it is possible you may have a DB pension in the mix - worth checking.

Marcon

DRS1 said:

At your age it is possible you may have a DB pension in the mix - worth checking.

Spot on. Assuming OP was working from the early 1980s on, final salary schemes would have been the only option where large PLCs were concerned (and joining the scheme could be a condition of employment, at least until 1988), until at least the late 1990s, and for many DB schemes some years thereafter if you were already a member of the scheme.

AHWGenX

dunstonh said:

Is there an "easy" / time efficient way to combine pension pots?  Am happy to put the legwork in as I don't want to waste £ having an IFA do all the work.

They will be combined as part of the purchasing the annuity.   

You will be paying someone to do the work, whether you use an IFA or not. And with larger funds, you will often pay more using internet-based annuity retailers  than you would an IFA.    

That's the bit I wasn't sure about, whether I had to combine the Pots in order to make an Annuity purchase, definitely a time server.  I think I know a local IFA so I'll see if she can assist once I get all the correct details lined up.

jimjames

AHWGenX said:

dunstonh said:

Is there an "easy" / time efficient way to combine pension pots?  Am happy to put the legwork in as I don't want to waste £ having an IFA do all the work.

They will be combined as part of the purchasing the annuity.   

You will be paying someone to do the work, whether you use an IFA or not. And with larger funds, you will often pay more using internet-based annuity retailers  than you would an IFA.    

That's the bit I wasn't sure about, whether I had to combine the Pots in order to make an Annuity purchase, definitely a time server.  I think I know a local IFA so I'll see if she can assist once I get all the correct details lined up.

You also don't have to make an annuity purchase any more. It might be something you want to do but it's not a requirement.

xylophone

from a range of large PLC's

As above - are any or all Defined Benefit?

Albermarle

jimjames said:

AHWGenX said:

dunstonh said:

Is there an "easy" / time efficient way to combine pension pots?  Am happy to put the legwork in as I don't want to waste £ having an IFA do all the work.

They will be combined as part of the purchasing the annuity.   

You will be paying someone to do the work, whether you use an IFA or not. And with larger funds, you will often pay more using internet-based annuity retailers  than you would an IFA.    

That's the bit I wasn't sure about, whether I had to combine the Pots in order to make an Annuity purchase, definitely a time server.  I think I know a local IFA so I'll see if she can assist once I get all the correct details lined up.

You also don't have to make an annuity purchase any more. It might be something you want to do but it's not a requirement.

As above, are you definitely sure that you want an annuity, rather drawing the pension pots down over time?
The latter needs a bit more managing and is not 100% guaranteed income ( although the likelihood is that it would generate more income than an annuity) and any left when you die can be left as a legacy.
Or you could use some of the money for an annuity, and some left for drawdown.

AHWGenX

I'm investigating the Draw Down options now, it does sound like a potentially better option.

dunstonh

AHWGenX said:

I'm investigating the Draw Down options now, it does sound like a potentially better option.

It could be.  But it could be potentially worse.  I am doing far more annuities at that moment.  I have done more in the last 12 months than I have in the previous 12 years.    We are in a current sweet spot for annuities.   

When you can get more than the safe withdrawal rate on drawdown with an RPI annuity, that is often the trigger to switch to annuity if your needs are likely to be steady for life and don't require phasing.