Simplification and a Focused Strategy
Through pension consolidation and having everything in one place, this can simplify matters allowing you to have a consistent and focused retirement strategy – rather than a fragmented approach where one plan may be better suited than others. It presents an opportunity to see if you can lower costs and improve investment choice and performance.
You can also ensure that the risk level you are taking is compatible with both your desired risk level, capacity for loss and of course your current circumstances and objectives.
If the pension was set-up a number of years ago, there is a good chance this will be out of alignment with one or more of these – especially if you have not engaged in regular reviews.
A pension consolidation could be moving the pension plans into one you already have – or if demonstrably more beneficial – to move these into a new plan entirely.
Check for Guarantees
Although there are lots of potential benefits from a pension consolidation exercise, there are sometimes reasons why it might not make sense to transfer a particular pension.
Examples of this can be where there are guarantees or protected benefits. This is where it really is essential to seek financial advice, and in fact, in many cases where the value is over £30,000, you will be required by regulation to do so.
How Does Pension Consolidation Work?
The first step is to have an initial consultation, and this can either be in person or by video meeting or phone. The initial consultation helps us to understand your circumstances in a bit more detail; the type of pensions you have; and what you would like to achieve. We will then outline the ways in which we can help you and the cost involved. If you are happy to proceed, we will then ask you to sign a letter of authority for each of the pensions concerned.
Research and Analysis
Our advice will confirm whether we are recommending you should retain or consolidate any of the pensions. Where this involves the recommendation of a new plan, we will provide full details of the product provider and the underlying portfolio of investments to be held. In each scenario, will outline in detail the reasons why we are making our recommendation.