If you’ve built up two or more pension pots during your working life, it might be easier to combine them when you retire. It might give you a better deal if you do.
Why you might want to bring your pension pots together when you retire
If you’ve had more than one job during your working life, it’s likely that you’ve paid into more than one pension.
If you’ve got several different pots, it might be worth combining them before you start drawing money from them.
Or you might choose different options for each pot.
Find out more in our guide Explore your pension options
Got questions about how your pension can be paid?
If you need help making sense of how and when you can access your pension pot, you can speak to someone from Pension Wise, a free service from MoneyHelper.
Leaving your pension pot untouched
If you’ve built up various pensions over the years, it can be difficult to keep track of how they’re performing.
It can be easier to review their investment performance if you bring your pension pots together.
Your current providers might have a limited range of investment options. Moving your pot to a different arrangement might give you a wider choice of investments.
You might be able to reduce the charges you pay on your pots if you move to another provider.
Need more information on pensions?
Call us free on 0800 011 3797 or use our webchatOpens in a new window. One of our pension specialists will be happy to answer your questions.
Our help is impartial and free to use, whether that’s online or over the phone.
Opening times: Monday to Friday, 9am to 5pm. Closed on bank holidays.
Getting a guaranteed income (annuity)
Do you intend to use your pension pots to buy an annuity? Then you might get a better deal from an annuity provider if you have one large pot, rather than several small ones.
An annuity is designed to provide you with a guaranteed income in retirement.
It will also be easier for you to keep track of a single, larger annuity payment – rather than several smaller ones.
You might find that some pension pots aren’t big enough to buy an annuity. Or the rates might not be good for small amounts.
But, by combining several small pots into a larger amount, you might be able to buy an annuity.
It’s important not to bring a pension pot that includes a guaranteed annuity rate together with other pots if the offered annuity rate is high. This is because the guaranteed annuity rate could be lost if you combine pots.
Setting up flexible retirement income (pension drawdown)
Similarly, if you intend to use your pension pot to provide you with a flexible income in retirement – it’s important to compare products and charges.
Charges can be cheaper if you take money out from a single, larger pot rather than several smaller pots.
It might also be easier for you to manage if your income and investments are in a single place. It helps to deal with one provider rather than lots.
Some providers have minimum sizes. So you might find that some pots aren’t big enough for the product you want. So you might want to bring your pots together.
Find out more in our guides:
Guaranteed retirement income (annuities) explained
What is flexible retirement income (pension drawdown)?
How to combine your pension pots
If you want to bring your pensions together in one place:
- Find out if your pensions have any special features or safeguarded benefits that you could lose if you move your pension to a new provider. And check if there are any charges you’ll need to pay to move them.
- Compare the different services and charges of each of your existing pension providers. And compare these with others, to make sure you’re getting the best deal.
There are many things to think about before transferring or combining pensions.
