Combining pensions

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El Pollo Diablo
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Combining pensions

Post by El Pollo Diablo » Thu May 12, 2022 1:49 pm

People who move jobs ever will be faced with the question of whether they should combine their past pensions into one pot. Is it worth doing?
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Gfamily
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Re: Combining pensions

Post by Gfamily » Thu May 12, 2022 2:25 pm

El Pollo Diablo wrote:
Thu May 12, 2022 1:49 pm
People who move jobs ever will be faced with the question of whether they should combine their past pensions into one pot. Is it worth doing?
[I'm the last person to ask], but one thing I can say is that if you have multiple sources of income, you'll need to keep close track of your tax codes.
The ideal would be to have 1 source - and that would then have the standard L1257 code, that would take the right amount each month. This will avoid you having to possibly find a lump sum to cover underpayments of tax.

On the other hand, multiple pensions means you're avoiding putting all your eggs in one basket. [/I'm the last person to ask]
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lpm
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Re: Combining pensions

Post by lpm » Thu May 12, 2022 2:28 pm

Don't think so. Dunno. I've never done it. I've got 6 separate pots.

Instinctively that feels like the multiple egg basket thing and spreading the risk. But you're supposed to fine tune everything because a sliver off the annual fees or a tiny improvement in performance compounds over the years.

However the real reason I've not combined is I haven't been arsed. Investigating it has been on my non-urgent to do list for at least 20 years.
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TopBadger
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Re: Combining pensions

Post by TopBadger » Thu May 12, 2022 2:32 pm

I have three pots. Two via employers and a SIPP via my IFA. Should really combine former employer pot into the SIPP as it's performance is much better.

Given each pot will be a spread of risks anyway, I don't see much benefit of having many pots.
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Bewildered
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Re: Combining pensions

Post by Bewildered » Thu May 12, 2022 3:01 pm

I have pensions in 3 or 4 different countries. One of them may be lost because it’s a very special corner case of brexit, but it’s a tiny amount anyway and I haven’t checked yet.

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Little waster
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Re: Combining pensions

Post by Little waster » Thu May 12, 2022 4:30 pm

The advice I was given was to leave the two tiny pots I have in "final salary pensions" as final salary pensions as they weren't worth transferring and then pool the tiny frozen contribution-based pension pot into my current tiny contribution-based pension pot as with a favourable economic climate* over the next 25 years and compound interest it may be worth up to a tin of cat-food* a week by the time I retire.

Overall the full advice was it was probably best for me to work till I'm 75 and then die two weeks later before the bread turns; the important thing is to have a plan.


*pause for hollow laughter

**I have no intention of getting a cat though, so yum-yum.
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Gfamily
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Re: Combining pensions

Post by Gfamily » Thu May 12, 2022 4:47 pm

I've got 5 years employment worth of Final Salary Pension that I could have taken 10 years ago, but decided to hold out because its value was increasing more as a "deferred pension" than it would have through Index linking.
I've asked for a statement of its value from time to time over the last 4 years and it seemed to be growing nicely (6-7% per year), right up until last year when the pension amount it was offering dropped by almost 10%.
I haven't dared* ask for a valuation since, as I've no idea whether it was a 1 off drop I can look forward to a significant bounce back, or whether it's likely to stay with the loss.

*bothered
My avatar was a scientific result that was later found to be 'mistaken' - I rarely claim to be 100% correct
ETA 5/8/20: I've been advised that the result was correct, it was the initial interpretation that needed to be withdrawn
Meta? I'd say so!

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