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Investment guide

One place for all your pensions

Make retirement easier

The chances are you’ve picked up lots of pensions throughout your working life and they now sit all over the place. This can make it difficult to stay on top of your retirement fund. But you could bring your pensions together pretty easily, making them more straightforward to manage while potentially saving you money.

Now, it’s not black and white. There could be good reasons to stay with one or more of your current providers. But thinking carefully about this now and making a decision either way could really help when you retire.

Here are some of the pros and cons…

Three reasons to consider bringing your pensions together

  1. 01

    It’s easier to keep track of your money

    Having all your pensions in one place could make it much easier to keep an eye on how much you have and how it’s growing. 

  2. 02

    You could save on fees

    The overall costs and charges involved with a pension have been coming down, which is good. But you could still benefit from consolidating your pensions to one with lower fees than those you’re currently paying overall. 

  3. 03

    Your pension could do better

    It’s possible that, over time, some of the underlying funds within a pension will lose their edge. Perhaps the main manager moves on, for example. This can leave a fund untouched and unloved – left to market movements. Making sure all your pension savings are well-managed now and into the future could make a big difference.

How easy is it?

Despite these possible benefits, you may be put off by thinking it’s too much hassle. But it doesn’t have to be.

If you’re transferring from one ‘defined contribution’ scheme to another, it’s often quite simple and can be done online, with something like our very own Royal Bank Invest. 

A defined contribution scheme is a type of pension where you agree how much you pay in, but don’t know how much you’re going to get back because it depends on how the underlying investments perform.

The potential drawbacks

As we said at the top, there are reasons to stay as you are too. For example, if you have a workplace pension that your employer is also paying into, you might want to stick with it. And you might be paying perfectly reasonable fees where you are.

Other reasons include:

  1. 01

    Already knowing what you’re going to get

    If you have a defined benefit (DB) scheme, it brings you a set outcome, usually based on your time with an employer and final salary. And many defined contribution schemes, including Royal Bank Invest, won’t take transfers from DB schemes.

  2. 02

    High exit charges

    Some pension schemes charge you quite a lot if you transfer out of them.

  3. 03

    A better retirement income

    The amount of money people  get each year when they retire – known as the ‘annuity rate’ –  has fallen over the last decade, so if you’re getting a good, guaranteed rate, it could be worth holding on to. Your current pension fund may also come with a guaranteed rate of return.

Still not sure?

If in doubt, you should consider getting help from an independent financial adviser. You should also check with your current pension providers to see what, if any, disadvantages there are to transferring.

The final value of your pension fund will depend primarily on how much has been paid in and how well the pension fund's investments have performed.

You should continue to hold cash for any short-term liquidity needs.

Learn more about investments

Whether you’re an experienced investor or just finding out what investing is, we’ve got a range of articles to help you understand more about investing.

We regularly update our articles depending on what’s happening in the market so check back for future updates.

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