Thursday, 20th September 2018
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John Smiles

Qualified Financial Advisor

Should I consolidate my pension funds?

The recently published 2018 Deloitte Millennial Survey found that 43% of those surveyed see themselves leaving their current jobs within two years. Only 28% plan on staying beyond five years.

This employment pattern has become the norm so it is not unreasonable to assume that a 30-year old will have worked for between 7 and 15 employers by the time they reach 68.

Research from LinkedIn confirms these findings; claiming people will change jobs up to 15 times during their working lives.

Retirement funding for the current generation could become quite troublesome as pension pots are accumulated across numerous employers. Keeping track of the various plans will become more and more difficult with each changing job. At retirement age, will they be able to track each of the pension plans and get access to their accumulated funds?

Consolidating the pension plans might make sense for some and the main reasons people consolidate are:


It is easier to manage one plan rather than six; less paperwork and it is easier to track your investment performance.

Size matters

Australian research shows people who have a pension fund equal to at least one year's salary are more likely to take an interest in it.

Taking control

In current trust-based pension schemes, Trustees may decide the investment strategy or allow the member a restricted investment choice. Consolidation allows the holder to make all investment decisions, but do take professional advice before making any investment decisions.

Taking pension benefits

When accessing retirement benefits, it can be difficult to ensure you are getting the full benefits, even if you have kept up-to-date records of various plans. It may be difficult to locate former employers or Trustees to sign the benefits over to you.

Get proper advice before making any decision on consolidation. A Retirement Planning Adviser will check what fees you pay; see if you can get better value; identify if your pension schemes will charge an exit fee and assess the value of guaranteed benefits from existing arrangements such as guaranteed annuity rates or loyalty bonuses.


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