Do I need to combine my pension pots?

As part of Pension Awareness Week, our Fintech Product Marketing Manager Rachael O'Neill asked our in-house financial expert to share his responses to the questions he is most often asked about pensions.

Mark Wilcox is a regulated and independent financial adviser who works within our MyEva team. Mark empowers client employees with advice on pensions, retirement planning, investments and more.

Read on for Mark's response to

Do I need to combine my pension pot

As we progress through our working lives, we work on average between 6-12 different jobs, and at each of those jobs, historically, we may not have been saving into our company pensions. However, in recent years, everyone now saves into their company pension thanks to auto-enrolment, which means many of us will end up with quite a few more pension pots when we retire. Potentially up to 12 or more if the research is anything to go by! Having more jobs and more pension pots is no bad thing. Saving into your workplace pension is the number 1 priority. That said, it is important to know how many pensions you have out there, who they are invested with (Scottish Widows, Aegon, etc.), how much is in them, and how they are performing. There is a worry that long-forgotten plans will end up in expensive, poorly performing funds, and the paperwork alone can be enough to put you off becoming more proactive and trying to sort through them.

Why do people combine their pension pots?

Most people I speak to want to combine their pension pots for the following reasons:

• They want to have all their pension savings in one place to make it easier to manage.
• They are looking for a plan that offers a better return on their investment to boost their retirement savings.
• They want to make it easier to monitor the?administrative fees?they are currently paying and reduce them if possible.

Is it a good idea to combine pension pots?

This is a tough question because there are many factors to consider, like the types of pensions you have, exit fees, and safe-guarded benefits that may be lost if you transfer out from a scheme.

If you’re thinking of combining pensions, there are several things you’ll need to consider first.

A good starting point is to check which?types of pensions?you have. For example, if any of your pensions are?defined benefit plans (DB), otherwise known as final salary pensions, these offer valuable benefits which are usually worth hanging on to. It’s also important to note that if your DB plan has a value greater than ￡30,000, then you are required to seek independent financial advice before you can transfer too.

Combining defined contribution plans is usually more straightforward, but it’s still worth seeking advice to make sure it’s the best option for you. Again, you don’t want to give up any important benefits. With this type of pension, the amount you’ll end up with at retirement depends on the size of the contributions and how the investments these have gone into have performed.?

A final word from Mark

"Combining your pensions can make it much easier to monitor how your money is performing, and it can help keep charges to a minimum. Additional benefits are that you’ll only receive one pension statement a year, which will show the current value of your retirement savings, how much you’re paying in fees, and what sort of income you might end up with in the future.

Having your retirement savings in one place may also make things simpler for you when you retire, as you’ll only have to decide how to take an income from one?pension pot".

About Mark

Mark is a qualified financial adviser working within our MyEva team. When you empower your employees with our Financial Wellbeing platform - MyEva, they can book a free 30-minute call with Mark to discuss their retirement plans. Some people find they get all the information they need from these 30-minute calls; others find they need more information in the form of financial advice.

Mark started working in financial services back in the mid-80s. Over the years, he's put in hundreds of hours of work to gain his financial qualifications. In fact, not many people know this, but financial advisers continue to take regular exams and qualifications throughout their careers - it's not one exam or qualification and done. Recently, Mark has taken a specialist pension transfer exam.

Aside from being a brilliant financial adviser, Mark loves to spend time with his family and is an avid sports fan. Mark loves helping people achieve their financial goals.

"I like to think of it as helping them enjoy their lives without worrying about their financial futures. They can get on with doing the things they love and living life to the fullest".