Pension Transfers Gathering Your Pension Pots
These days there is no such thing as a job for life. Today’s school leavers can expect to have as many as 12 jobs within their working life. If you start a new pension every time you move employers, then before long you will have lots of different pensions all over the place. Many of these preserved pensions may be forgotten about and keeping track of how much each is worth and what they could be worth when you retire can be a nightmare.
There are many reasons why you may want to transfer you’re pension to another provider although consolidation of lots of pension pots is a common reason. Each of the reasons why transferring a pension could be beneficial will be looked at below:
Investment Performance – Ultimately the performance of your pension will have a massive impact on how much you will have at retirement. If you have several different plans with no overall investment strategy then you may find many are underperforming and unsuitable. By transferring all your pensions to one plan you can benefit from a single tailored investment strategy.
Lower Charges – Due to the economies of scale the charges on one big pension is likely to be smaller than those of several smaller ones. Many older plans also have much higher charges than the more modern alternatives. One thing to consider though is the cost of transferring. Some providers have market value adjusters. A financial adviser will check on this before a pension transfer carried out.
Flexibility – Older pension may not have much or none investment choice. Many of the with profit pensions are seriously underperforming. Newer modern pension have unlimited flexibility some with a self invested element and others with massive fund choices.
