Money helpdesk: Is it worth consolidating all of my pension funds?

OVER my working life for the past eleven-plus years and moving between a variety of companies, I have accumulated a number of pensions, mainly money-purchase and one final salary, resulting in five separate pension funds.

I am 33 years of age and I am concerned that I will end up with many small pension funds all adding up to not very much.

What is my best approach in order to consolidate my overall pension fund?

SB

Tom McPhail, head of research at Hargreaves Lansdown, says:

Consolidating your pensions is a good idea. It means that you can form a coherent overview of your retirement provision, something which is almost impossible when your money is scattered across a number of arrangements. Similarly, you can run one investment strategy, whereas if your money is spread across several arrangements it is impossible to plan your asset allocation and fund choices as effectively.

So, a good idea. But another guiding principle is that it is generally better to leave final salary pensions where they are as the penalties for transferring out tend to be pretty severe.

As for penalties on your money purchase pensions, I suggest you write to the companies and ask what costs would be involved in transferring out. It may still be worth it.

Consolidate into your company pension if it has low charges and decent investment choices. If not, consider consolidating into one individual pension such as a Self-Invested Personal Pension to run alongside your company pension.