Pension Consolidation

Pension consolidation is the act of combining all your pensions into a single account with the goal of simplifying your pension savings. If you have worked for several employers over your career, it is not uncommon to have built up multiple pensions and this can make it harder to track and manage them effectively.

Simplification and a Focused Strategy

Through pension consolidation and having everything in one place, this can simplify matters allowing you to have a consistent and focused retirement strategy – rather than a fragmented approach where one plan may be better suited than others. It presents an opportunity to see if you can lower costs and improve investment choice and performance.

You can also ensure that the risk level you are taking is compatible with both your desired risk level, capacity for loss and of course your current circumstances and objectives.

If the pension was set-up a number of years ago, there is a good chance this will be out of alignment with one or more of these – especially if you have not engaged in regular reviews.

A pension consolidation could be moving the pension plans into one you already have – or if demonstrably more beneficial – to move these into a new plan entirely.

Check for Guarantees

Although there are lots of potential benefits from a pension consolidation exercise, there are sometimes reasons why it might not make sense to transfer a particular pension.

Examples of this can be where there are guarantees or protected benefits. This is where it really is essential to seek financial advice, and in fact, in many cases where the value is over £30,000, you will be required by regulation to do so.

How Does Pension Consolidation Work?

STEP 1

Initial Engagement

The first step is to have an initial consultation, and this can either be in person or by video meeting or phone. The initial consultation helps us to understand your circumstances in a bit more detail; the type of pensions you have; and what you would like to achieve. We will then outline the ways in which we can help you and the cost involved. If you are happy to proceed, we will then ask you to sign a letter of authority for each of the pensions concerned.

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STEP 2

Information Gathering

We will then contact each of the pensions concerned and gather all the relevant information that we will need to carry out our research and analysis. We will also invite you to complete our own Fact-Finding and Risk Profiling questionnaire documents so that we can build up a more detailed and accurate picture of your circumstances, your goals and objectives.

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STEP 3

Research and Analysis

Using sophisticated financial planning tools, we will carry out objective analysis that looks at key metrics – such as cost, performance, and diversification benefit. We can also compare features such as investment choice and retirement drawdown options. It is important to understand not only how well or poorly something may have performed – but how does that measure up against alternative solutions that are taking the same level of risk? This needs to be quantified and measured objectively.

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STEP 4

Advice Stage

After we have completed our comprehensive analysis of all available options in the marketplace, we will provide you with our suitability report determining the most appropriate outcome.

Our advice will confirm whether we are recommending you should retain or consolidate any of the pensions. Where this involves the recommendation of a new plan, we will provide full details of the product provider and the underlying portfolio of investments to be held. In each scenario, will outline in detail the reasons why we are making our recommendation.

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STEP 5

Implementation

Should you wish to proceed with any of our recommendations, we will assist with all the necessary paperwork to facilitate any transfers – and where applicable – the opening of the new pension plan.

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STEP 6

Ongoing Advice

Where you would like us to provide ongoing review and management, we will discuss with you the level of service that would be most suitable. Whilst there can be many tangible benefits from having active management and regular reviews of your pensions, such services are optional, and you can cancel them at any time.

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Take control of your financial future

Contact First Equitable today and take control of your financial future; together we will chart your journey towards achieving your goals and objectives.
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