With changes in jobs and careers so much more commonplace now and often with a new pension at each employer, it is not unreasonable for an individual to amass a broad selection of different pension plans during their working lives.
Each pension will have its own underlying investments, performance, asset allocation, charges and administration for you to monitor and invariably this gets neglected, which is often to the individual’s disadvantage.
Whilst not suitable for everyone, did you know that one option that exists and appeals to many is the option of combining all of the pensions into one single plan? This can really help you to get a firm handle on the progress of the pension provision, total annual contributions as well as how your money has been invested (instead of inadvertently having far too much or all of your money sitting in cash, property or popular (but frothy) US technology funds for example). Charges can become more transparent too although please remember that the cheapest option is rarely the best one, you do tend to get what you pay for! For example, unlike most other advisers, we offer our own pension which we manage independently in-house and our management fees actually include an offer to review your pension with you on an annual basis. This is often very enlightening for our clients as they learn more about their funding options and the generous tax treatment of the pension during their lifetime as well as for future generations on death, when benefits can remain protected from Inheritance Tax. As necessary, we will also discuss the various options to extract benefits in later life and in so doing keep Income Tax deductions to a minimum. Through these regular client exchanges, we are also far more reactive to a client’s individual requirements than the typical insurance company or investment platform where you are simply an account number. Such an offering has been rewarded by funds under our direct management now exceeding £200Million which is across pensions, ISAs, Portfolios and Bonds. Of course, you do need to consider eligibility for employer pension contributions, any guaranteed benefits and transfer penalties/charges (although they are less common now) when considering your options but bringing together all or some of your pensions instead of leaving them in numerous different locations is usually well worth exploring.
