Around half of women in the UK in their 50s currently have a workplace pension, while nearly a quarter of women have a private pension. Have you kept track of all your pensions?
Having a job for life is a thing of the past. The modern flexible working environment means that a you may work for many employers over their lifetime; that means you are likely to have different pensions scattered around that you might even lose track of. According to research by Prudential one in six workers have lost track of a company pension scheme; which is an awful waste of money.
The convenience of having all your pensions in one place means that you can track their performance more easily and probably save on charges. There are plenty of low cost pension providers around. However, before you act right way there are 3 points you might want to consider.
- Defined benefits schemes
The case for transferring out of a defined benefit or final salary scheme is an extremely complex decision. In a nutshell it involves giving up benefits that are visible into the future in return for a cash sum now, where you have no idea how that cash when it is re-invested will perform
- Other benefits embedded in a pension
Your existing pensions may have valuable features like death benefits or a Guaranteed Annuity Rate which you would lose if you switched to another provider.
- Exit penalties
Some pensions are subject to an exit penalty if you transfer out early. You need to evaluate whether it is worth paying these sums to make your pension arrangements more streamlined.
With these considerations in mind, it may make sense to consolidate, but not without seeking suitable advice first. Remember pensions consolidation is a more important consideration than combining your broadband and TV packages; or gas and electricity!
Part 1 – Are you Scared of the Stock Market?
Part 2 – Making Your Money Work for You
Part 3 – A Brief Guide to the Two Faces of Debt
Part 4 – Are you Ready for the Stock Market?
Part 5 – Three-Point Plan for the Investors New to the Stock Market
Part 6 – Should I Consolidate my Pensions?