Should I combine my pensions?

jigsaw puzzle in pieces

Sarah Austin, Independent Financial Adviser from Cambridge based Martin-Redman Partners, talks through things to consider when deciding whether to combine several pension plans, or not.

If you have had more than one employer, it is likely that you may have one workplace pension scheme. You may have also taken out a personal pension yourself and may be considering whether it is best to consolidate two or more of them. Below we outline some benefits and drawbacks that you should consider.

Should I consolidate my pensions while I am still working and building up pension funds?
This may:

  1. Make it easier to invest efficiently and in accordance with your attitude to investment risk.

  2. Make it easier to keep addresses and contact details up to date; ensuring you receive Annual Statements from each pension provider telling you how much your plan is worth.

  3. Allow you to benefit from low charges and simplified contracts.

  4. Streamline the process of taking income when you come to retire, where the pension offers an easy route to flexi-access drawdown, annuity purchase or other methods of taking your benefits.

Modern pension contracts, especially Workplace or Stakeholder schemes, will have common terms and conditions - the ongoing charges are fixed by regulation. Consolidating these schemes is normally straightforward, but always check the small print and contact an Independent Financial Adviser (IFA) if you are in any doubt.

When could consolidating my pensions not be in my best interests?

  1. You have a Defined Benefit scheme, (Final Salary Scheme), with guaranteed benefits and no investment risk.

  2. You have an older pension contract with Guaranteed Minimum Pension, (GMP), or Guaranteed Annuity Rates, (GAR), where the contractual benefits exceed what you can buy on the open market with the fund value.

  3. You have a pension plan, which contains non-unitised with-profit funds with terminal bonuses at the Normal Retirement Age or a fund guarantee.

  4. Where you might benefit from the “Small Pots” rules, allowing you to take no more than 3 pension pots of less than £10,000, without affecting any other schemes. There is more information in a great article on The Pensions Advisory Service website here.

If I am already near retirement, is it still worth consolidating my old workplace or personal pension pots?
This could:

  1. Allow you to reduce fund and platform charges with large-fund discounts.

  2. Make it easier to plan your income and improve your tax planning.

  3. Allow you to use flexi-access drawdown, where the original pension contract does not make provision for it.

  4. Allow you to benefit from higher annuity rates from larger pension pots, as an element of bulk-purchase.

If you decide to combine your pension plans, this is done by moving the plans into a single scheme (either a new scheme or one of your existing plan).

It’s important to look into the small print of each pension that you are considering combining, as the terms and conditions of each can vary (especially if they have valuable guarantees as mentioned above, or limited investment options which could reduce potential investment growth) which could affect your retirement income in later life.

This is an area where professional independent financial advice can make a great deal of difference.

How do I get independent financial advice to understand whether I should consolidate my pensions?

Tax and pensions can seem a complex area; we are always very happy to arrange an initial meeting, at no cost to you, to provide you with detailed pensions advice on the area, particular to your circumstances and future retirement goals.

Please contact us at or call us on 01223 792 196 to arrange an initial appointment with one of our Independent Financial Advisers.

About Martin-Redman Partners  

We are a team of experienced Independent Financial Advisers (IFAs) who can advise on your personal or business financial arrangements. We have been building trusted relationships with clients for many years by articulating clear and tailored recommendations in areas ranging from investments to retirement planning, to complex estate planning advice. 

We offer expert independent financial advice throughout Cambridgeshire, Leicestershire, Suffolk, East Anglia and the South East.  Many of our clients are within, or are in the surrounding areas of Cambridge, Grantham, Stamford, Bury St Edmunds, Frinton on Sea, Ely, Peterborough, Huntingdon, Cambourne, Newmarket, Soham and Oundle.

The information contained is for guidance only and does not constitute financial advice. It is based on our understanding of UK legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly, no responsibility can be assumed by Martin-Redman Partners its officers or employees, for any loss in connection with the content hereof and any such action or inaction. 


We provide independent financial advice on investments, pensions, inheritance tax planning and protection. We work with private individuals, businesses and professional introducers, such as accountants and solicitors, to ensure our clients financial advice needs are met.

Martin-Redman Partners