Your pension is the most important thing you’ll ever invest in. Without it, you won’t be stopping work any time soon – and with the UK Government thinking of bringing the state pension age to 75, unless you have your own pension in place to access earlier, you’ll be waiting until 75 before they’ll start helping you.
Let that sink in for a second.
Could you do the job you do at 75? Perhaps, but often not.
I really don’t want that to be you.
Gone are the days when pensions looked after you well into your old age. Most companies cannot afford to look after you in this way anymore!
But saying that, there is the compulsory pension now called auto-enrollment which is an improvement. However, it means that if you are like the average modern worker, changing jobs every 2-5 years, you might end up with 11 different pensions by the time you’re ready to finish work!
So get curious! What’s happening with your pension/s right now?
How to trace your “lost” pensions
It’s common for people to feel overwhelmed by this task, but it doesn’t have to be. The pensions advisory service is a great place to start.
When I did this, I looked back at my CV and traced jobs I had prior to starting work for the NHS. Needless to say, I didn’t have any pensions from my part-time work, so the task was easy. I contacted the HR departments of the companies to ask them. They took my national insurance number and my date of birth, plus the dates and locations of the places I worked at, and got an answer very quickly.
There’s also the UK government’s online tool you can use to find a pension scheme associated with your previous employment.
Make a list of every pension you find, and keep it readily available. It’s useful to note at what age you’d be able to access the pension, and any fees associated with them too.
Financial advisers and pension planners will need this information, so if you ever decide to use one, you’re going to look super slick to them and you’ll feel confident going in to speaking with them.
After you have created your list, you’ll need to decide if you want to keep it like this, or whether you’d actually do better to consolidate all your pensions together.
Now this is something you may need to seek advice on, especially if you have a few large pension pots, and especially if you are doing this in your later years. You may have a really good final salary pension in the mix of it all that if you were to move elsewhere, would risk losing the great benefits associated with it.
If however you just have loads of small pensions, clubbing them all together into one place may actually not be a bad idea.
- you know the sum total of your pension
- it’s easier to then track your net worth with time to check you’re on track to meet your goals
- fees can be streamlined, so you’re not paying separate fees on every pension you own (because there will be fees associated if you ask)
- it makes you feel like you’re in control, and with confidence comes reduced stress and anxiety – and that’s what The Female Money Doctor is ALL ABOUT!
How Do I Consolidate?
It sounds tricky, but it’s not. Many companies now offer consolidation services to do the heavy lifting for you, but you still need to know where you pensions are so they can help.
Hargreaves Lansdown offers the Vantage SIPP, PensionBee is an app you can download that helps you do just that, and now MoneyBox is jumping on the consolidation bandwagon, and has opened up a waiting list for people to do this with them (both on Apple/Google Play/Android).
Don’t forget that your own workplace can also help with this. I discovered recently that I could have transferred a pension into my NHS one (if I had any previous ones). The advantage of this is that you continue to KEEP the employer’s portion of the pension contribution. If you completely go it alone, you miss out on this FREE MONEY!
So if you’re going to consolidate, you have quite a few number of options open to you. It might be worth having one main pension with your current workplace, and transfer all the little itty bitty ones from previous jobs into one of the above accounts so you have a separate pension that you can add money to yourself and pick what you do to top up. Or you could just transfer the lot into your current workplace pension and pool it all together.
Just Be Careful!
Before you do anything have a chat with the pensions advisory service. Just double check that you’re not missing out on anything important like a defined benefit bonus. If you have a lot to move about, you’ll have to seek paid professional help as well.
You also need to think about fees – you may have some pensions with low fees, and some with high fees. How do these compare with your current workplace pension or with Hargreaves Lansdown, MoneyBox or PensionBee? If the fees are better where you are, it’s probably not worth switching into a more expensive one.
But it’s entirely up to you at the end of the day, so make sure you’re happy!
The money advice service has some great tips you can read more about in this article.
I did a short summary of this article in one of my recent 10-minute takeaways!
I have a free short e-book that illustrates some additional ways in which you can invest for your retirement called The Essential Guide To Retirement.
Whatever you do, being aware of your pension is the best thing for your financial future. Having money set aside for your old age will stand you in good stead and will help you make choices. Without it, life will be a struggle indeed.
So go out there and investigate what’s going on for your right now! I’d love to know what you find out. Come into my free private Facebook group and comment on what you discover.
Until next time,